Introduction

This quotation is from an interesting study that tries to analyse the relevance of globalisation for the observed changes in wages and unemployment of low-skilled labour in Western industrialised countries. The empirical evidence suggests that this relevance varies significantly across these countries (OECD, 1997). In some countries globalisation, either through increased trade or increased factor mobility, is thought to have had an adverse impact on particularly the relative wages of low-skilled workers, whereas in other countries relative low-skilled wages are hardly affected or have even increased. Moreover, in some cases the impact of globalisation does not seem to show up in relative wage changes but (also) in an increase in the relative unemployment of low-skilled labour (Dewatripont, Sapir and Sekkat, 1999). One possibility to explain these differences is that there may be considerable cross-country variation in the degree of globalisation as well as in the workings of national labour markets. With respect to the latter the well-known differences in wage flexibility between notably the USA and the UK and the continental European countries come to mind (Layard, Nickell and Jackman, 1991).