Trade, technology, and the labour market: impacts on wage inequality within countries

Abstract

This paper focuses on the widening wage inequality between skilled and unskilled workers within countries and discusses whether trade and technology have contributed to this trend. The paper develops an analytical framework for wage inequality that traces the determinants and their relative roles in wage inequality in different stages of the development of trade theory, especially those considering new evidence after 2011. We find that technology plays a key role in the rise of wage inequality in most countries, while trade plays an increasingly crucial and more complex role in recent years. Skill supply institutions, such as education systems supplying skilled labour or unions participating in wage‐setting processes, suppress the rise of wage inequality in some countries. The paper further outlines the mechanisms through which trade affects wage inequality, including offshoring, firm heterogeneity, labour market frictions and global value chains. We find that trade has indirect effects on technology, which further enlarges the wage inequality among skills. The paper also discusses the policy implications of the impacts of trade and technology on wage inequality.

Technology and Economic Disparities in the Nigerian Labor Market

“…This leads to the inverse movement between technology innovation and labor pricing. The position of this study confirms previous authors' (Walwei, 2016;Gries & Nuade, 2018;Wang et al, 2021) positions that technology advancement promotes inequality in labor relations. Despite the variation in study population, environment and in the methodological approach of this study from the previous studies, the result from this study is in line with earlier findings.…”

“…They revealed that there is a need to build data for such study in the future. Wang et al (2021) focused on trade and technology roles in reducing wage inequalities among some selected countries. A qualitative research design was used to design a way of measuring wage inequality.…”

Pengembangan E-Modul Plantnet Ayat Al-Qur'an Terpadu Sebagai Sumber Belajar Ilmu Pengetahuan SMP/MTs pada Klasifikasi Makhluk Hidup

“…Teknologi berkembang secara cepat dan signifikan (Daniel 2020), Sehingga Negara harus bisa adaptasi secara cepat termasuk aspek pendidikan (Verma et al, 2021;Takahashi et al, 2020). Kolaborasi antara bidang pendidikan dengan teknologi adalah komponen yang harus dilakukan (Wang, Findlay, and Thangavelu 2021).…”