Technology and the Future of European Employment
Show Less

Technology and the Future of European Employment

Edited by Pascal Petit and Luc Soete

What is the potential of the new information and communication technologies? This book assesses the relationship between technological change and employment in all its dimensions, focusing on contemporary economies in Europe. The authors discuss patterns of growth, and the type of employment that countries might expect to be created following the introduction of these new technologies.
Buy Book in Print
Show Summary Details

Chapter 12: Modelling the link between skill biases in technical change and wage divergence through labour market extensions of Krugman’s North–South model

Adriaan van Zon, Mark Sanders and Joan Muysken

Extract

12. Modelling the link between skill biases in technical change and wage divergence through labour market extensions of Krugman’s North–South model Adriaan van Zon, Mark Sanders and Joan Muysken 1. INTRODUCTION A growing problem in the OECD area over the recent past has been the position of low-skilled workers relative to their high-skilled counterparts. The employment and income perspectives of the former have deteriorated significantly over the past two decades owing to a drop in the relative demand for their services. Economic theory has tried to come to grips with the empirical observation that the effects of this drop in low-skilled labour demand differ widely between Europe and the USA. In fact, there are two distinct empirical observations which led us to the problem we wish to address in this chapter. First of all, the OECD (1994) and several independent academic researchers (Brauer and Hickok, 1995) have observed that in the Anglo-Saxon parts of the world wages for low-skilled workers have deteriorated in relative but in some cases even in absolute terms. To explain this phenomenon economists have formed two hypotheses. The first attributes the effect to the factor price equalizing effects of increased trade with low-wage countries (Leamer, 1994, 1995; Burtless, 1994; Lawrence and Slaughter, 1993). The second hypothesis emphasizes the possibility of technological change causing a divergence between the productivity of high- and low-skilled workers and thus causing a drop in relative demand for low-skilled labour, together with wage divergence in line with productivity. Some notable...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.


Further information

or login to access all content.