This paper studies how producers' idiosyncratic risks affect an industry's aggregate dynamics in an environment where certainty equivalence fails. In the model, producers can place workers in two types of jobs, organized and temporary. Workers are less productive in temporary jobs, but creating...

Although many developing countries have experienced growing income inequality and an increase in the relative demand for skilled workers during the 1980s, the sources of this trend remain a puzzle. This paper examines whether investment and adoption of skill-biased technology have contributed to...

This study examines the impact of unions on wages and employment using data from Uruguay in a period where unions were banned (1973-1984), then legalized with tripartite bargaining (1984-1991) followed by industry-wide or firm-specific bargaining (1992-1997). The relationship between wages and...

Recently, the relative demand for skilled labor has increased dramatically. We investigate one of the causes, skill-biased technical change. Advances in information technology (IT) are among the most powerful forces bearing on the economy. Employers who use IT often make complementary...

We study the effects of oil price changes and other shocks on the creation and destruction of U.S. manufacturing jobs from 1972 to 1988. We find that oil shocks account for about 20-25 percent of the cyclical variability in employment growth under our identifying assumptions, twice as much as...

There has been little analysis of the impact of inward foreign direct investment (FDI) on U.S. wage inequality, even though the presence of foreign-owned affiliates in the United States has arguably grown more rapidly in significance for the U.S. economy than trade flows. Using data across U.S....

In this paper, I develop a model to analyze how skill premia differ over time and across countries, and use this model to study the impact of international trade on wage inequality. Skill premia are determined by technology and the relative supply of skills. An increase in the relative supply of...

The U.K. skill premium fell from the 1950s to the late 1970s and then rose very sharply. This paper examines the contributions to these relative wage movements of international trade and technical change. We first measure trade as changes in product prices and technical change as TFP growth....

The recent experience of Washington State provides a natural setting to examine the effects of the unemployment insurance payroll tax on wages, employment, claims and denials. During the 13 year period from 1972 through 1984, all employers in Washington paid the same unemployment insurance (UI)...

This paper offers a model where firms decide what types of jobs to create and then search for suitable workers. When there are few skilled workers and the productivity gap between the skilled and the unskilled is small, firms create a single type of job and recruit all workers. An increase in...