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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
Article
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Abstract

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.

Keywords

Labour Market International Economic Public Finance Technical Change Unskilled Worker 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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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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