Globalisation, co-operation costs and wage inequalities

Edward Anderson, Paul J. G. Tang, Adrian Wood

Research output: Contribution to journalArticlepeer-review

10 Citations (Scopus)
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Abstract

The falling cost of international business travel and communication motivates highly-skilled workers who live in developed countries to spend more of their time co-operating with less-skilled workers in developing countries. This tends to narrow the gap between developed and developing countries in the wages of less-skilled workers, but to widen the wage gap within developed countries between highly-skilled and less-skilled workers. The paper formalizes this mechanism and tests it on data for the United States and developing countries. The two effects on wage inequalities of greater co-operation of highly-skilled workers with workers in developing countries both seem quantitatively important.
Original languageEnglish
Pages (from-to)569-595
Number of pages27
JournalOxford Economic Papers
Volume58
Issue number4
DOIs
Publication statusPublished - 2006

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