Inter- and intracountry effects of the Covid-19 pandemic on wages and economic growth

• Tipo: Artigo em Revista Científica Internacional
• Data: 2023

Autores

Óscar Afonso (Autor) FEP

Revista

Título: Bulletin of Economic Research

Vol. 75 Nº 4

Páginas: 1291-1322

ISSN: 0307-3378

Editora: Wiley-Blackwell

Indexação

ISI Web of Knowledge - 3 Citações

Scopus - 4 Citações

Outras Informações

ID Authenticus: P-00Y-PC8

DOI: 10.1111/boer.12412

Abstract (EN): This paper aims to investigate the impact of the Covid-19 pandemic on technological knowledge, wage inequality, and economic growth, by proposing a Direct-Technical-Change model with two economies, an Innovative and other Follower. Six hypotheses are considered: (i) decrease in the unskilled-labor supply, (ii) decrease in the absolute advantage of unskilled labor, (iii) decrease in the intensity of the unskilled sector, (iv) hypothesis (i) combined with a lower decrease in the skilled-labor supply, (v) hypothesis (ii) combined with a lower decrease in the absolute advantage of skilled labor, (vi) all the variations previously considered. By comparing the steady states before and after the shock, we find an increase in the technological-knowledge bias that favors the skill-intensive sector, which positively affects the skill premium. However, in hypotheses (i) and (iv), the decrease in the relative supply of unskilled labor dominates the effect on the skill premium, which thus decreases. The economic growth rate is always penalized except for hypothesis (iii). Hypotheses (ii) and (iv) are undesirable because they increase wage inequality and penalize economic growth. Governments should support innovative activity, the engine of technological-knowledge progress, and thus economic growth, but with caution not to exacerbate the skill premium.

Idioma: Inglês

Tipo (Avaliação Docente): Científica

Nº de páginas: 32