Wage Inequality in the United Kingdom: Trade And/Or Technology?

17 Pages Posted: 11 Jul 2003

See all articles by Roberto A. De Santis

Roberto A. De Santis

European Central Bank (ECB) - Directorate General Economics

Abstract

I employ two alternative intra-industry trade Applied General Equilibrium (AGE) models to explain some stylised facts of the British economy. The model with skill-biased technical change can explain the rise in wage inequality between skilled and unskilled workers, the decline in manufacturing and the expansion of modern services. However, the model where technical change is trade-induced performs better, because it can also explain the exponential rise of imported intermediate capital goods and developments in the wage rate of unskilled workers.

Suggested Citation

De Santis, Roberto A., Wage Inequality in the United Kingdom: Trade And/Or Technology?. World Economy, Vol. 26, pp. 893-909, June 2003. Available at SSRN: https://ssrn.com/abstract=423347

Roberto A. De Santis (Contact Author)

European Central Bank (ECB) - Directorate General Economics ( email )

Kaiserstrasse 29
D-60311 Frankfurt am Main
Germany

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