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Globalization, co-operation costs, and wage inequalities

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

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. Copyright 2006, Oxford University Press.

Suggested Citation

  • Edward Anderson & Paul J. G. Tang & Adrian Wood, 2006. "Globalization, co-operation costs, and wage inequalities," Oxford Economic Papers, Oxford University Press, vol. 58(4), pages 569-595, October.
    • Handle: RePEc:oup:oxecpp:v:58:y:2006:i:4:p:569-595
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    Citations

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    Cited by:

    1. Mariacristina Piva & Massimiliano Tani & Marco Vivarelli, 2023. "The productivity impact of short-term labor mobility across industries," Small Business Economics, Springer, vol. 60(2), pages 691-705, February.
    2. Mayda, Anna Maria, 2005. "Who is Against Immigration? A Cross-Country Investigation of Individual Attitudes Towards Immigration," CEPR Discussion Papers 5055, C.E.P.R. Discussion Papers.
    3. Johannes Fedderke & Yongcheol Shin & Prabhat Vaze, 2003. "Trade, Technology and Wage Inequality in the South African Manufacturing Sectors," Edinburgh School of Economics Discussion Paper Series 106, Edinburgh School of Economics, University of Edinburgh.
    4. Binelli Chiara, 2015. "How the wage-education profile got more convex: evidence from Mexico," The B.E. Journal of Macroeconomics, De Gruyter, vol. 15(2), pages 509-560, July.
    5. Milanovic, Branko, 2002. "Can we discern the effect of globalization on income distribution? evidence from household budget surveys," Policy Research Working Paper Series 2876, The World Bank.
    6. Branko Milanovic, 2005. "Can We Discern the Effect of Globalization on Income Distribution? Evidence from Household Surveys," The World Bank Economic Review, World Bank, vol. 19(1), pages 21-44.
    7. Adrian Wood (ODID), "undated". "A practical Heckscher-Ohlin model," QEH Working Papers qehwps170, Queen Elizabeth House, University of Oxford.
    8. Maria Bas, 2008. "Trade, Technology Adoption and Wage Inequalities: Theory and Evidence," CEP Discussion Papers dp0902, Centre for Economic Performance, LSE.
    9. Anna Maria Mayda, 2006. "Who Is Against Immigration? A Cross-Country Investigation of Individual Attitudes toward Immigrants," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 510-530, August.
    10. Meltem Ucal & Alfred Albert Haug & Mehmet Hüseyin Bilgin, 2016. "Income inequality and FDI: evidence with Turkish data," Applied Economics, Taylor & Francis Journals, vol. 48(11), pages 1030-1045, March.
    11. Piva, Mariacristina & Tani, Massimiliano & Vivarelli, Marco, 2020. "Business visits, technology transfer and productivity growth," GLO Discussion Paper Series 486, Global Labor Organization (GLO).
    12. Piva, Mariacristina & Tani, Massimiliano & Vivarelli, Marco, 2020. "The productivity impact of business visits across industries," MERIT Working Papers 2020-011, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    13. Wanida Ngienthi, 2013. "Offshoring Prompts High Quality Labour Markets," Pacific Economic Review, Wiley Blackwell, vol. 18(5), pages 628-643, December.
    14. Bas, Maria, 2008. "Trade, technology adoption and wage inequalities: theory and evidence," LSE Research Online Documents on Economics 28513, London School of Economics and Political Science, LSE Library.
    15. Ucal, Meltem & Bilgin, Mehmet Huseyin, 2009. "Income Inequality and FDI in Turkey: FM-OLS (Phillips-Hansen) Estimation and ARDL Approach to Cointegration," MPRA Paper 48765, University Library of Munich, Germany.
    16. Binelli Chiara, 2015. "How the wage-education profile got more convex: evidence from Mexico," The B.E. Journal of Macroeconomics, De Gruyter, vol. 15(2), pages 509-560, July.
    17. Edward Anderson, 2014. "Time differences, communication and trade: longitude matters II," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(2), pages 337-369, May.
    18. Mbaye, Linguère Mously & Okara, Assi & Tani, Massimiliano, 2022. "Labor Mobility and Innovation in Africa," IZA Discussion Papers 15004, Institute of Labor Economics (IZA).
    19. Linguère Mously Mbaye & Assi Okara & Massimiliano Tani, 2022. "Working Paper 361 - Labour mobility and innovation in Africa," Working Paper Series 2487, African Development Bank.

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