While inequality increased in English-speaking economies, there was much less of an increase in many continental European countries. To date, there is no consensus for why there was such a divergence in inequality trends among these relatively similar economies. Considering endogenous technology choices may be useful here. Recent research suggests that labor market institutions compressing the structure of wages, as in many continental European economies, might induce firms to introduce additional new technologies to be used with their unskilled employees. Wage compression makes unskilled workers more expensive to employ and, conditional on wishing to employ them, it increases the value of raising their productivity.
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Overall, however, our understanding of the reasons for cross-country differences in inequality is weak, and much research is necessary on this topic, as well as on the relationship between technology and labor market institutions and social norms.
Technology and the Recent Changes in Wage Inequality
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This program is sponsored by the Clarke Forum for Contemporary Issues and co-sponsored by the Churchill Fund and the departments of women’s and gender studies, educational studies, policy studies, and sociology. It is part of the Clarke Forum’s semester theme,and its .
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Nevertheless, most economists discount the role of globalization and trade for a variety of reasons. First, the volume of trade is still small. Second, the major intervening mechanism for the trade explanation, a large increase in the relative prices of skill-intensive goods because of greater world demand for these, has not been observed. Third, inequality also has increased in many of the LDCs trading with the United States,whereas the simplest trade and globalization explanations predict a decline in inequality in relatively skill-scarce economies, like the LDCs.
Document Object Identifier (DOI): 10.3386/w11057
This program is sponsored by the Clarke Forum for Contemporary Issues and the Morgan Lecture Fund and co-sponsored by the Churchill Fund, Division of Student Life, the departments of sociology, women’s and gender studies, Africana studies, American studies, anthropology, English, history, philosophy, and political science. It is also part of the Clarke Forum’s semester theme, and the .
It’s the Inequality, Stupid – Mother Jones
This talk examines how intersectional frameworks shed light on new directions for anti-racist activism, especially among African American youth.