Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- Preface
- Acknowledgements
- List of conference participants
- 1 Introduction
- PART ONE GENERAL POLICY ISSUES
- PART TWO DEMAND MANAGEMENT AND SUPPLY-SIDE POLICY
- PART THREE SUBSIDISING EMPLOYMENT AND TRAINING
- 6 The simple economics of benefit transfers
- Discussion
- Discussion
- 7 Wage subsidy programmes: alternative designs
- Discussion
- Discussion
- 8 Technological development, competition from low-wage economies and low-skilled unemployment
- Discussion
- 9 Macroeconomic and policy implications of shifts in the relative demand for skills
- Discussion
- 10 Would cutting payroll taxes on the unskilled have a significant impact on unemployment?
- Discussion
- 11 Preventing long-term unemployment: an economic analysis
- Discussion
- Discussion
- PART FOUR LABOUR MARKET REGULATIONS
- PART FIVE POLICY, JOB REALLOCATION AND THE UNEMPLOYMENT–PRODUCTIVITY RELATION
- PART SIX COMPARING UNEMPLOYMENT POLICIES
- Index
8 - Technological development, competition from low-wage economies and low-skilled unemployment
Published online by Cambridge University Press: 07 September 2010
- Frontmatter
- Contents
- List of figures
- List of tables
- Preface
- Acknowledgements
- List of conference participants
- 1 Introduction
- PART ONE GENERAL POLICY ISSUES
- PART TWO DEMAND MANAGEMENT AND SUPPLY-SIDE POLICY
- PART THREE SUBSIDISING EMPLOYMENT AND TRAINING
- 6 The simple economics of benefit transfers
- Discussion
- Discussion
- 7 Wage subsidy programmes: alternative designs
- Discussion
- Discussion
- 8 Technological development, competition from low-wage economies and low-skilled unemployment
- Discussion
- 9 Macroeconomic and policy implications of shifts in the relative demand for skills
- Discussion
- 10 Would cutting payroll taxes on the unskilled have a significant impact on unemployment?
- Discussion
- 11 Preventing long-term unemployment: an economic analysis
- Discussion
- Discussion
- PART FOUR LABOUR MARKET REGULATIONS
- PART FIVE POLICY, JOB REALLOCATION AND THE UNEMPLOYMENT–PRODUCTIVITY RELATION
- PART SIX COMPARING UNEMPLOYMENT POLICIES
- Index
Summary
The economic position of the less skilled members of the workforce has deteriorated over the past 20 years, both in Western Europe and in the USA. In Europe, the deterioration manifests itself primarily through higher unemployment. In the USA, it manifests itself mainly through lower real and relative wages. The phenomenon has a cyclical aspect, associated with slow growth and recessions. There is, however, also mounting evidence of a structural trend, associated with technological development and competition from low-wage economies – a trend that is likely to gain rather than lose momentum over the coming years. The combination of uncertain growth perspectives and a lasting structural weakness exacerbates the conflict between equity and efficiency: how can we promote full employment without producing unsustainable income inequalities?
This chapter surveys some of the evidence and arguments. Section 1 reviews briefly the current situation, the weight of the evidence behind proposed explanations, and the theoretical case for international wage convergence. Section 2 discusses policy objectives and brings out the efficiency–equity dimension of the problem. Section 3 evaluates some policy alternatives and draws conclusions.
The weakened position of less-skilled workers
High unemployment and low wages
The simplest and most objective measure of skills is educational attainment. Table 8.1 records unemployment rates for five levels of education in 19 OECD countries in 1989. In every single country there is a marked decline in unemployment as education rises.
- Type
- Chapter
- Information
- Unemployment PolicyGovernment Options for the Labour Market, pp. 250 - 277Publisher: Cambridge University PressPrint publication year: 1997
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