Impact De L’Ouverture Nord-Sud Sur Le Progrès Technique Et Les Inégalités Salariales (The Impact of North-South Trade upon Technical Change and Wage Inequality)

Abstract

We analyse the influence of North-South openness on technological change and on inequalities between skilled and unskilled workers in the advanced countries (the ‘North’). A North-South model of endogenous growth based on technological knowledge is constructed and simulated according to 3 scenarios: autarky, North-South openness with flexible labour markets, and openness with a minimum wage in the North. The model shows that North-South openness (i) increases the skill premium and reduces R&D and the productivity growth when labour markets are perfectly competitive, and (ii) increases R&D and productivity at the expense of the less skilled employment when there is a minimum wage. In the long term, openness with a minimum wage in the North is the best situation in terms of real income per head.

Keywords: Inequality, Minimum wage, North-South openness, Technical change

JEL Classification: F43, J30, O30, O40