Drèze and Sneessens' chapter 8 gives a survey of recent trends in unemployment and the evolution of relative wages. In particular, it stresses the high proportion of the low-skilled unemployed in Europe and the increasing wage dispersion in the USA. I will concentrate on two factors that have been explored in chapter 8, the role of technological development and the role of competition from low-wage countries, in my view the most relevant ones. Since the chapter is a survey study, my discussion can be seen as complementing some of the issues raised. I will start by addressing some of the issues on the relationship between technological development and the emergence of low-skilled unemployment; I will then make some remarks on the role of international trade and will conclude with complementing some of the policy options addressed by Drèze and Sneessens.

Technological progress and unemployment

The observation that the low skilled in particular find it harder to find a job and that wage differentials between low skilled and high skilled have increased (especially in the USA) suggests that there has been a relative demand shift in favour of high-skilled workers, as argued in the chapter. While the authors particularly stress the importance of lowskilled unemployed and build their discussion around this theme, it is the case that the unemployment rate for the high skilled has also increased, at least from the 1970s to the 1980s, as shown in table D8.1.