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Efficiency‐Wage Unemployment and Intersectoral Wage Differentials in a Heckscher–Ohlin Model

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  • Max Albert
  • Jürgen Meckle

Abstract

The paper analyzes a Heckscher–Ohlin (HO) model with efficiency‐wage unemployment (henceforth HOe model). We show that all HO results have close HOe analogues. Additionally, conditions are derived under which immigrants might not only find employment for themselves but also raise employment for natives. Moreover, we analyze the ranking of countries with respect to their rate of unemployment, showing that this ranking may be reversed as countries move from autarky to trade. All results are clearly linked to factor intensities and the pattern of intersectoral wage differentials.

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  • Max Albert & Jürgen Meckle, 2001. "Efficiency‐Wage Unemployment and Intersectoral Wage Differentials in a Heckscher–Ohlin Model," German Economic Review, Verein für Socialpolitik, vol. 2(3), pages 287-301, August.
    • Handle: RePEc:bla:germec:v:2:y:2001:i:3:p:287-301
    DOI: 10.1111/1468-0475.00039
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    2. Vesna Stavrevska, 2011. "The efficiency wages perspective to wage rigidity in the open economy: a survey," International Journal of Manpower, Emerald Group Publishing Limited, vol. 32(3), pages 273-299, June.
    3. Joël Hellier, 2013. "The North-South HOS Model, Inequality and Globalization," Palgrave Macmillan Books, in: Joël Hellier & Nathalie Chusseau (ed.), Growing Income Inequalities, chapter 4, pages 107-146, Palgrave Macmillan.
    4. Guido G. Porto, 2008. "Agro-Manufactured Export Prices, Wages and Unemployment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(3), pages 748-764.
    5. Jürgen Meckl, 2006. "Does European Unemployment Prop Up American Wages? National Labor Markets and Global Trade: Comment," American Economic Review, American Economic Association, vol. 96(5), pages 1924-1930, December.
    6. Joel Hellier & Ekaterina Kalugina, 2015. "Globalization and the working poor," Working Papers 355, ECINEQ, Society for the Study of Economic Inequality.

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