A first conclusion is that the impact on wages and unemployment depends critically on the level and type of the transportation costs that is being reduced, the distribution of low and high skilled labour and notably also on the degr e e of wage flexibility.
Globalisation is by no means always bad news for the low-skilled.
On the contrary, in some of the simulations that we performed, the low-skilled are better off in terms of their relative wage or the unemployment outcome as globalisa tion progresses. A final conclusion is that it matters a great deal for the effects of globalisation whether or not wages are rigid. The paper is available as a an Adobe Acrobat PDF File. You will require the Acrobat Reader to read it and to print it out. Click here to get a free copy of the Acrobat reader.