English, Article, Journal or magazine article edition: Does It Matter What We Trade? Trade and Industrial Policies When Labor Markets Don't Clear William T. Dickens

User activity

Share to:
 
Bookmark: http://trove.nla.gov.au/version/140309
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Does It Matter What We Trade? Trade and Industrial Policies When Labor Markets Don't Clear
Author
  • William T. Dickens
Physical Description
  • preprint
Notes
  • In efficiency wage models firms set employment so that the value of the marginal revenue product of labor (VMRPL) equals the wage. If the payment of efficiency wages results in inter-industry wage differences for comparable workers there exist welfare enhancing industrial and trade policies which shift employment from low to high wage industries. Previous attempts to measure the potential impact of such policies have assumed that wages equal the VMRPL, but not all explanations for inter-industry wage differences have that property. This paper argues, from the evidence on inter-industry wage differences that rent-sharing/​extraction models should be preferred to other explanations. However, such models do not all have the property that wages equal the VMRPL. In the model presented VNRPL is set equal to the opportunity cost of labor so policies to shift employment to high wage industries would be of no value. Further, the empirical work that has been done to assess the importance of labor market distortions for trade and industrial policy is inapplicable if such models are the correct explanation for interindustry wage differences. A rent-extraction model that takes into account workers' limited information about the profitability of the company they work for is developed. In that model high wage industries have high VPL so policies to shift employment to high wage industries are appropriate and past empirical studies of the effects of trade and industrial policy are approximately correct.
  • RePEc:nbr:nberwo:3285
Language
  • English
Contributed by
OAIster

Get this edition

Other links

  • Set up My libraries

    How do I set up "My libraries"?

    In order to set up a list of libraries that you have access to, you must first login or sign up. Then set up a personal list of libraries from your profile page by clicking on your user name at the top right of any screen.

  • All (1)
  • Unknown (1)
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.

User activity


e.g. test cricket, Perth (WA), "Parkes, Henry"

Separate different tags with a comma. To include a comma in your tag, surround the tag with double quotes.

Be the first to add a tag for this edition

Be the first to add this to a list

Comments and reviews

What are comments? Add a comment

No user comments or reviews for this version

Add a comment