Globalization and wage polarization
In the 1980s and 1990s, the US labour market experiences a remarkable polarization along with fast technological catch-up, as Europe and Japan improve their global innovation performance. Is foreign technological convergence an important source of wage polarization? To answer this question, we build...
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| Format: | Article |
| Language: | English |
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Massachusetts Institute of Technology Press
2015
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| Online Access: | https://eprints.nottingham.ac.uk/34138/ |
| _version_ | 1848794782230380544 |
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| author | Cozzi, Guido Impullitti, Giammario |
| author_facet | Cozzi, Guido Impullitti, Giammario |
| author_sort | Cozzi, Guido |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | In the 1980s and 1990s, the US labour market experiences a remarkable polarization along with fast technological catch-up, as Europe and Japan improve their global innovation performance. Is foreign technological convergence an important source of wage polarization? To answer this question, we build a multi-country Schumpeterian growth model with heterogeneous workers, endogenous skill formation and occupational choice. We show that convergence produces polarization through business stealing and increasing competition in global innovation races. Quantitative analysis shows that these channels can be important sources of US polarization. Moreover, the model delivers predictions on the US wealth-income ratio consistent with empirical evidence. |
| first_indexed | 2025-11-14T19:21:40Z |
| format | Article |
| id | nottingham-34138 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T19:21:40Z |
| publishDate | 2015 |
| publisher | Massachusetts Institute of Technology Press |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-341382017-10-12T20:50:26Z https://eprints.nottingham.ac.uk/34138/ Globalization and wage polarization Cozzi, Guido Impullitti, Giammario In the 1980s and 1990s, the US labour market experiences a remarkable polarization along with fast technological catch-up, as Europe and Japan improve their global innovation performance. Is foreign technological convergence an important source of wage polarization? To answer this question, we build a multi-country Schumpeterian growth model with heterogeneous workers, endogenous skill formation and occupational choice. We show that convergence produces polarization through business stealing and increasing competition in global innovation races. Quantitative analysis shows that these channels can be important sources of US polarization. Moreover, the model delivers predictions on the US wealth-income ratio consistent with empirical evidence. Massachusetts Institute of Technology Press 2015-11-16 Article PeerReviewed application/pdf en https://eprints.nottingham.ac.uk/34138/1/rest_a_00551.pdf Cozzi, Guido and Impullitti, Giammario (2015) Globalization and wage polarization. Review of Economics and Statistics, 98 (5). pp. 984-1000. ISSN 1530-9142 wage polarization heterogeneous workers wealth-income ratio endogenous technical change international technology competition personal service sector http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00551 doi:10.1162/REST_a_00551 doi:10.1162/REST_a_00551 |
| spellingShingle | wage polarization heterogeneous workers wealth-income ratio endogenous technical change international technology competition personal service sector Cozzi, Guido Impullitti, Giammario Globalization and wage polarization |
| title | Globalization and wage polarization |
| title_full | Globalization and wage polarization |
| title_fullStr | Globalization and wage polarization |
| title_full_unstemmed | Globalization and wage polarization |
| title_short | Globalization and wage polarization |
| title_sort | globalization and wage polarization |
| topic | wage polarization heterogeneous workers wealth-income ratio endogenous technical change international technology competition personal service sector |
| url | https://eprints.nottingham.ac.uk/34138/ https://eprints.nottingham.ac.uk/34138/ https://eprints.nottingham.ac.uk/34138/ |