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Globalization, Skill Accumulation and the Skill Premium
Author(s) -
Borissov Kirill,
Hellier Joël
Publication year - 2013
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12028
Subject(s) - globalization , economics , endowment , inequality , wage inequality , labour economics , value (mathematics) , work (physics) , demographic economics , market economy , wage , political science , mathematics , mechanical engineering , mathematical analysis , statistics , law , engineering
We analyze the impact of globalization upon the skill premium (inequality) in advanced countries from a two‐goods North–South model with skill accumulation. Globalization consists of an increase in the size of the South. Its impact on inequality depends on its intensity and on the pre‐globalization proportion of skilled workers. The post‐globalization inequality is a non‐monotonic function of the pre‐globalization proportion of skilled workers and of the globalization intensity. The impact is different for the generation in work and for the following generations. There is a threshold value of the skill endowment under (above) which inequality is lower (higher) after than before globalization.
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