De Economist

, Volume 149, Issue 1, pp 1–12 | Cite as

Wage Divergence and Asymmetries in Unemployment in a Model with Biased Technical Change

  • Joan Muysken
  • Mark Sanders
  • Adriaan van Zon


In an attempt to explain the different wage and unemployment responses in mainland Europe and the US to a fall in demand for low-skilled labour, we present a model with two levels of skills and two classes of goods. We analyse the response to skill-biased technical change in two distinct labour market regimes. A trade-off between wage divergence and unemployment of skilled and unskilled workers occurs. Skill-biased technical change turns out to have a different impact in both regimes, due to a different working of the chimney effect.


Labour Market International Economic Public Finance Technical Change Unskilled Worker 
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Copyright information

© Kluwer Academic Publishers 2001

Authors and Affiliations

  • Joan Muysken
  • Mark Sanders
  • Adriaan van Zon

There are no affiliations available

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