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| Takeho Nakamura |
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| ''Wage inequality and welfare effects of domestic technological progress: a dual economy approach'' |
| ( 2007, Vol. 15 No.22 ) |
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| This paper shows that technological progress caused by a domestic high-tech firm always increases the skilled-unskilled wage inequality, using a two-sector, two-labor model. Also, we derive a sufficient condition for the technological progress to be effective in increasing domestic welfare. In the Cobb Douglas production function case, if the equilibrium relative wage is greater than a threshold level, domestic welfare unambiguously increases in response to the technological progress. Moreover, we also provide some policy implications of our results, in the context of developing countries. |
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| Keywords: |
JEL: O1 - Economic Development: General
O3 - Technological Change; Research and Development: General |
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| Manuscript Received : Jul 30 2007 | | Manuscript Accepted : Nov 13 2007 |
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