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| Author: | Ekholm, K. Midelfart, K.H. |
| Title: | Relative wages and trade-induced changes in technology |
| Journal: | European Economic Review
2005 : AUG, VOL. 49:6, p. 1637-1663 |
| Index terms: | economic integration trade technology pay labour markets models |
| Language: | eng |
| Abstract: | A model is developed where trade liberalization leads to skill-biased technological change, which in turn raises the relative (hereafter as: rel.) return to skilled labour (here as: sk-lab). When firms get access to a larger market, the rel. profitability of different technologies changes in favour of the more skill-intensive (here as: sk-int.) technology. As the composition of firms changes to one with predominantly sk-int. firms, the rel. demand for sk-lab. increases. This way, a link is established btw. trade, technology and rel. returns to skilled and unskilled labour. |
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