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Title:Sectoral value added prices, TFP growth, and the low-skilled wage in high-income countries PDF Logo
Authors:Lücke, Matthias
Issue Date:1999
Series/Report no.:Kieler Arbeitspapiere 923
Abstract:This econometric analysis investigates the impact of changes in sectoral valueadded prices and total factor productivity (TFP) on the equilibrium relative wage of low-skilled workers in eleven high-income countries. The key finding is that TFP growth mandated an increase in the unskilled wage, relative to the remuneration of human capital, during the 1970s, but a decrease during the 1980s. This is consistent with the observation that, in most sample countries, the relative wage and employment opportunities of low-skilled workers tended to improve until about 1980, but have deteriorated since then. While the regression results suggest that technological change played a large role in shifting labour demand against low-skilled workers, this conclusion is qualified because the empirical evidence is also compatible with product upgrading and outsourcing of low-skill intensive production activities to low-income countries.
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des IfW
Kieler Arbeitspapiere, IfW

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