Abstract
Since the mid-1970s wage inequality has increased sharply in OECD countries. Among the factors singled out by economists as possible major contributors to this development are economic globalisation processes and skill-biased technological change. Although these are most commonly considered as independent influences, the present authors argue, after critically outlining views about these factors, that strong interdependence exists between them. The article then examines potential policy responses to this growing inequality.
Similar content being viewed by others
References
P. Aghion, J. G. Williamson: Growth, Inequality and Globalization, Cambridge 1998, Cambridge University Press; A. Atkinson: Bringing income distribution in from the cold, Presidential address to the Royal Economic Society, Swansea 1997; M. J. Slaughter: International trade and labour-market outcomes: results, questions, and policy options, in: Economic Journal, Vol. 108, 1998, pp. 1452–1462.
R. B. Freeman: Are your wages set in Beijing? in: Journal of Economic Perspectives, Vol. 9, No. 3, 1995, pp. 15–32.
I. Shapiro: The latest IRS data on after-tax income trends, Washington 2001, Center on Budget and Policy Priorities. http://www.cbp.org.
A. Wood: North-South Trade, Employment and Inequality. Changing Fortunes in a Skill-Driven World, Oxford 1994, Clarendon Press; A. Wood: Globalisation and the rise in labour market inequalities, in: Economic Journal, Vol. 108, 1998, pp. 1463–1482.
R. Z. Lawrence, M. J. Slaughter: International trade and American wages in the 1980s: giant sucking sound or small hiccup? in: Brookings Papers on Economic Activity, No. 2, 1993, pp. 161–210.
G. Borjas: The economics of immigration, in: Journal of Economic Literature, Vol. 32, No. 4, 1994, pp. 1667–1717.
R. Z. Lawrence, M. J. Slaughter, op. cit. International trade and American wages in the 1980s: giant sucking sound or small hiccup? in: Brookings Papers on Economic Activity, No. 2, 1993, pp. 161–210.
A. Wood: North—South Trade…, op. cit. ;
Ibid.
G. J. Borjas, R. B. Freeman, L. F. Katz: On the labour market effects of immigration and trade, in: G. J. Borjas, R. B. Freeman (eds.): Immigration and the Workforce: Economic Consequences for the United States and Source Areas. Chicago 1992, Chicago University Press, pp. 213–244.
G. Borjas, op. cit. The economics of immigration, in: Journal of Economic Literature, Vol. 32, No. 4, 1994, pp. 1667–1717.
J. Bhagwati, V. Dehejia: Free trade and wages of the unskilled: is Marx striking away? in: J. Bhagwati, M. Kosters (eds.): Trade and Wages, Washington D.C. 1994, American Enterprise Institute, pp. 36–75.
G. J. Borjas, R. B. Freeman, L. F. Katz, op. cit., pp. 213–244.; J. D. Sachs, H. J. Shatz: Trade and jobs in US manufacturing, in: Brookings Papers on Economic Activity, No. 1, 1994, pp. 1–69.
A. Wood: North—South Trade…, op. cit.
R. Z. Lawrence, M. J. Slaughter, op. cit. International trade and American wages in the 1980s: giant sucking sound or small hiccup? in: Brookings Papers on Economic Activity, No. 2, 1993, pp. 161–210.
J. D. Sachs, H. J. Shatz, op. cit. Trade and jobs in US manufacturing, in: Brookings Papers on Economic Activity, No. 1, 1994, pp. 1–69.
E. Berman, J. Bound, Z. Griliches: Changes in demand for skilled labour within US manufacturing: evidence from annual survey of manufactures, in: Quarterly Journal of Economics, Vol. 109, No. 2, 1994, pp. 367–397.
C. Scherrer: The economic and political arguments for and against social clauses, in: Intereconomics, January/February, 1996, pp. 9–20.
J. Bound, G. Johnson: Changes in the structure of wages in the 1980's: an evaluation of alternative explanations, in: American Economic Review, Vol. 82, No. 3, 1992, pp. 371–392.
S. Machin: Wage inequality in the UK, in: Oxford Review of Economic Policy, Vol. 12, No. 1, 1996, pp. 47–64.
J. A. Schumpeter: Capitalism, Socialism and Democracy, 4th edn., London 1954, Allen and Unwin.
D. S. Siegel: Skill-biased technological change. Evidence from a firm-level survey, Nottingham 1999, Upjohn Institute for Employment Research, Business School, University of Nottingham.
K. Murphy, F. Welch: Occupational change and the demand for skill, in: American Economic Review, Vol. 83, No. 2, 1993, pp. 122–126.
A. Wood: North—South Trade…, op. cit..
C. Juhn, K. Murphy, B. Pierce: Wage inequality and the rise in returns to skill, in: Journal of Political Economy, Vol. 101, No. 3, 1993, p. 410–442.
P. Aghion, P. Howitt, G. L. Violante: Technology, Knowledge and Inequality, Princeton 1999, mimeo, Princeton University.
R. C. Feenstra: Integration of trade and disintegration of production in the global economy, in: Journal of Economic Perspectives, Vol. 12, No. 4, 1998, pp. 31–50.
A. Wood: North—South Trade…, op. cit..
P. J. G. Tang, A. Wood: Globalisation, Co-operation Costs and Wage Inequalities, mimeo, Brighton 2000, Institute of Development Studies, University of Sussex.
E. Anderson: Skilled worker mobility and wage inequality, Discussion Paper in Economics, No. 71, University of Sussex, Brighton 2001.
J. B. Brigden et al.: (Australia Committee on Economic Effects of the Tariff): The Australian Tariff: An Economic Enquiry, Melbourne 1929, Melbourne University Press.
J. A. Schumpeter: op. cit..
S. Svizzero, C. A. Tisdell: Concepts of competition in theory and practice, in: Revista Internazionale di Scienze Economiche e Commericali, Vol. 68, No. 2, 2001, pp. 145–162.
C. A. Tisdell, I. Seidl: Niches and economic competition: implications for economic efficiency, growth and diversity, in: Economic Theory, Applications and Issues, Working Paper No. 8, 2001, School of Economics, The University of Queensland, Brisbane, 4072.
C. A. Tisdell: Diversity and economic evolution: failure of competitive systems, in: Contemporary Economic Policy, Vol. 17, No. 2, 1999, pp. 156–165.
N. C. Lustig: NAFTA: setting the record straight, in: The World Economy, Vol. 20, No. 5, 1997, pp. 605–614.
C. Juhn, K. Murphy, B. Pierce, op. cit. Wage inequality and the rise in returns to skill, in: Journal of Political Economy, Vol. 101, No. 3, 1993, p. 410–442.
P. Aghion, P. Howitt, G. L. Violante: op. cit..
B. A. Weisbrod: Education and investment in human capital, in: Journal of Political Economy, Vol. 70, No. 5, 1962, pp. 106–123; M. Blaug: The rate of return on investment in education, in: The Manchester School, Vol. 33, 1965, pp. 205–51.
J. G. Riley: Testing the educational screening hypothesis, in: Journal of Political Economy, Vol. 87, No. 5, 1979, pp. S227–51; M. Spence. Market Signalling, Cambridge, Mass. 1974, Harvard University Press.
See C. A. Tisdell: Microeconomics of Markets, New York 1982, John Wiley and Sons.
See M. Spence, op. cit.. See H. R. Varian: Intermediate Microeconomics: A Modern Approach, New York. 1996, W. W. Norton and Company, pp. 636–641.
C. A. Tisdell, S. Svizzero: Globalization, Social Welfare, Labor Markets and Fiscal Competition, in: Economic Theory, Applications and Issues, Working Paper No. 5, 2001, School of Economics, University of Queensland, Brisbane, 4072.
D. Rodrik: Has Globalisation Gone Too Far?, Washington DC 1997, Institute for International Economics.
P. Dawkins, P. Kenyon: Globalisation and labour markets: implications for Australian public policy, GLM Research Paper 2000/7, University of Nottingham.
M. Friedman: Capitalism and Freedom, Chicago, 1962, Chicago University Press.
C. A. Tisdell, S. Svizzero, op. cit..
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Svizzero, S., Tisdell, C. Reconciling globalisation and technological change: Growing income inequalities and remedial policies. Intereconomics 37, 162–171 (2002). https://doi.org/10.1007/BF02928876
Issue Date:
DOI: https://doi.org/10.1007/BF02928876