Format du dépôt |
Fichier |
Type de dépôt |
Pré-publication, Document de travail |
Titre |
en
Technical Change Biased Toward the Traded Sector and Labor Market Frictions
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Résumé |
en
This paper investigates the relative wage and the relative price effects of higher productivity growth in tradables relative to non tradables in a two-sector open economy model with search unemployment. Applying cointegration methods to a panel of eighteen OECD countries over the period 1970-2007, our estimates reveal that a 1 percentage point increase in the productivity differential between tradables and non tradables lowers the non traded wage relative to the traded wage (relative wage) by 0.22% and appreciates the relative price of non tradables by 0.64%. While the decline in the relative wage reveals the presence of mobility costs preventing from the wage equalization across sectors, the relative wage responses to a productivity differential
display a large dispersion across countries, thus suggesting that labor market frictions vary substantially across OECD economies. Using a set of indicators capturing the heterogeneity of labor market frictions across economies, we find that the relative wage significantly declines more in countries where labor market regulation is more pronounced. These empirical findings can be rationalized in a two-sector open economy model with search in the labor market and an endogenous labor force participation. In line with our estimates, our quantitative analysis reveals that the relative wage falls more in countries where unemployment benefits are more generous, firing cost is high, the worker bargaining power is large, and/or the labor force is less responsive at the extensive margin. When calibrating the model to each OECD economy, our numerical results reveal that the model predicts the relative wage response fairly well, and to a lesser extent the relative price response.
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Auteur(s)
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Luisito Bertinelli
1, 2
, Olivier Cardi
3, 4
, Romain Restout
5, 6
1
CREA -
Centre de recherche en épistémologie appliquée
( 1173 )
- ROUTE DE SACLAY 91128 PALAISEAU CEDEX
- France
-
École polytechnique ( 300340 )
;
-
Centre National de la Recherche Scientifique UMR7656 ( 441569 )
2
Faculty of Law, Economics and Finance
( 154134 )
- 1511;Luxembourg
- France
-
University of Luxembourg [Luxembourg] ( 366875 )
3
UT -
Université de Tours
( 300298 )
- 60 rue du Plat d'Étain, 37020 Tours cedex 1
- France
4
LEO -
Laboratoire d'Économie d'Orleans [UMR7322]
( 199945 )
- Université d'Orléans - UFR Droit Economie Gestion - Rue de Blois - BP 26739 - 45067 ORLÉANS Cedex 2
- France
-
Université d'Orléans UMR 7322 ( 300297 )
;
-
Université de Tours UMR 7322 ( 300298 )
;
-
Centre National de la Recherche Scientifique UMR 7322 ( 441569 )
5
BETA -
Bureau d'Économie Théorique et Appliquée
( 93745 )
- Université de Lorraine, UFR Droit Sciences Economiques et Gestion, 13 place Carnot CO 70026, 54035 Nancy Cedex
Université de Strasbourg, Faculté des Sciences Economiques et de Gestion, 61 avenue de la Forêt Noire 67085 Strasbourg Cedex
- France
-
Institut National de la Recherche Agronomique UMR1443 ( 92114 )
;
-
Université de Strasbourg ( 199013 )
;
-
Université de Lorraine ( 413289 )
;
-
Centre National de la Recherche Scientifique UMR7522 ( 441569 )
6
UCL -
Université Catholique de Louvain = Catholic University of Louvain
( 92863 )
- Place de l'Université 1 - 1348 Louvain-La-Neuve
- Belgique
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Langue du document |
Anglais
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Date de production/écriture |
2015
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Domaine(s) |
-
Sciences de l'Homme et Société/Economies et finances
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Mots-clés (JEL) |
-
E - Macroeconomics and Monetary Economics/E.E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy/E.E2.E22 - Investment • Capital • Intangible Capital • Capacity
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F - International Economics/F.F1 - Trade/F.F1.F11 - Neoclassical Models of Trade
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F - International Economics/F.F4 - Macroeconomic Aspects of International Trade and Finance/F.F4.F41 - Open Economy Macroeconomics
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F - International Economics/F.F4 - Macroeconomic Aspects of International Trade and Finance/F.F4.F43 - Economic Growth of Open Economies
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J - Labor and Demographic Economics/J.J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers/J.J6.J63 - Turnover • Vacancies • Layoffs
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L - Industrial Organization/L.L1 - Market Structure, Firm Strategy, and Market Performance/L.L1.L16 - Industrial Organization and Macroeconomics: Industrial Structure and Structural Change • Industrial Price Indices
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Mots-clés |
en
Productivity growth, Sectoral wages, Relative price of non tradables, Search theory, Unemployment
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