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Title:Product Market Integration, Wage Dispersion and Unemployment PDF Logo
Authors:Torben M. Andersen
Issue Date:2001
Series/Report no.:IZA Discussion paper series 279
Abstract:Even when international product market integration is taking place between fairly similar countries with low labour mobility, it may have important effects for labour markets by increasing the mobility of jobs. This creates both opportunities through exports and threats from imports. Is there any reason why the benefits and costs of product market integration should be unequally distributed across different groups in the labour market? Considering integration as a gradual process lowering trade frictions it is found that there is such a bias in the sense that the gains tend to accrue to the high paid and the loses to the low paid. Product market integration may thus lead to a more inequal distribution of wages and employment, even though there are aggregate gains in terms of higher real incomes and employment.
Subjects:Trade frictions
wage formation
inequality and unemployment
JEL:F15
J30
J50
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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