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| Author: | Duranton, G. |
| Title: | The economics of production systems: segmentation and skill-biased change |
| Journal: | European Economic Review
2004 : APR, VOL. 48:2, p. 307-336 |
| Index terms: | Pay Skilled workers Car industry Models |
| Language: | eng |
| Abstract: | This article proposes a model of labour market segmentation and skill-biased change. With an example case of car industry, it is assumed that higher quality goods require higher skills from workers and therefore the distribution of skills defines the boundaries of the production systems and finally determines the wages. The findings indicate, that while an increase in the amount of skilled workers can first cause higher wages for all workers, the wage of the unskilled workers is about to be diminished later. The result is consistent with the evolution of the US labour market. |
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