Review of World Economics

, Volume 148, Issue 1, pp 181–207 | Cite as

Scale-independent North-South trade effects on the technological-knowledge bias and on wage inequality

Original Paper

Abstract

This paper develops a general equilibrium endogenous growth model that highlights the scale-independent mechanisms through which trade-induced North-South technological-knowledge diffusion affects the technological-knowledge bias and, thus, the paths of intra-country wage inequality. In contrast with the market-size effect, stressed in the previous literature on skill-biased technological change, the operation of the emphasized price channel following openness predicts, in line with the recent trends in developed and developing countries, an increasing skilled technological-knowledge bias, which, in turn, rises wage inequality in favor of skilled labor.

Keywords

North-South trade Technological-knowledge diffusion Technological-knowledge bias Wage inequality 

JEL Classification

F16 F43 O31 O33 

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Copyright information

© Kiel Institute 2011

Authors and Affiliations

  1. 1.CEFUP, Faculdade de EconomiaUniversidade do PortoPortoPortugal

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