Trade Liberalisation, Technological Change and Skill-Specific Unemployment

  • Sabine Engelmann Technische Universität Dresden Fakultät Wirtschaftswissenschaften Lehrstuhl für Volkswirtschaftslehre, insbes. Internationale Wirtschaftsbeziehungen
Keywords: trade, technology, heterogeneous firms, labour market frictions

Abstract

The aim of this paper is to formalise a two-country model of trade liberalisation and technological change with heterogeneous firms and search-and-matching frictions in the labour market. By considering different sectors and factors of production we allow for comparative advantages and study the trade and technology effects within and between sectors on wages and employment of skilled and low-skilled workers. Technological change together with inter-sectoral trade has distributional consequences across the labour force, favouring the skilled against the low-skilled workers. Intra-sectoral trade counteracts as it increases the demand for low-skilled workers, too. The overall effects on wages and employment of skilled and low-skilled workers depend on the extent of technological change, inter-sectoral trade and intra-sectoral trade.

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Published
2012-12-01
How to Cite
Engelmann, S. (2012). Trade Liberalisation, Technological Change and Skill-Specific Unemployment. Journal of Global Economy, 8(3), 197-224. https://doi.org/10.1956/jge.v8i3.264
Section
Articles