The trade-off between unemployment and wage inequality revisited
重新检验了克鲁格曼假说，通过估计异质性劳动的供需模型，分析了法国、英国和美国在1990年代的劳动力市场变化，发现法国的情况支持该假说，并扩展了假说以考虑劳动供给对工资的敏感性。
The Krugman hypothesis attributes high wage inequality in the USA and high unemployment in continental Europe in the 1980s to the same negative change in the demand for the low skilled under different degrees of wage rigidity. This article revisits the hypothesis to explain the labour market developments in France, the UK, and the USA in the 1990s. I estimate a labour supply and labour demand model with heterogeneous types of labour to analyse the effects of market forces and wage rigidity on changes in skill-group labour market outcomes. The results provide evidence in favor of the Krugman hypothesis when France is compared to the USA and the UK. I also find support for an extended version of the Krugman hypothesis, which suggests that when labour supply is sensitive to wages, there is a trade-off between unemployment on one hand and wage inequality and inactivity on the other.