Do Labor Rents Justify Strategic Trade and Industrial Policy?

45 Pages Posted: 11 Aug 2000 Last revised: 17 Jul 2022

See all articles by William T. Dickens

William T. Dickens

Northeastern University - Department of Economics; Federal Reserve Banks - Federal Reserve Bank of Boston; Brookings Institution

Date Written: May 1995

Abstract

Several efficiency wage theories of wage determination have the property that identical workers are more productive in high wage industries and that the promotion of employment in high wage industries can increase GDP (and some measures of welfare). I argue that while policies to favor high wage industries may increase productivity, the effects in developed economies are likely to be very small. This is mainly because the workers who fill the high wage vacancies will come from fairly high wage jobs.

Suggested Citation

Dickens, William T., Do Labor Rents Justify Strategic Trade and Industrial Policy? (May 1995). NBER Working Paper No. w5137, Available at SSRN: https://ssrn.com/abstract=225202

William T. Dickens (Contact Author)

Northeastern University - Department of Economics ( email )

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Federal Reserve Banks - Federal Reserve Bank of Boston ( email )

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Brookings Institution ( email )

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