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Guest lecture

Globalisation and Wages: some lessons from history

Event series: 

Notes from Professor David Greasley's Guest Lecture presented at the Treasury on 18 March 2003.


Professor David Greasley

University of Edinburgh



Lessons of Economic History (Taken from David Greasley's notes)

  • Migration tends to equalise wages internationally, but had little effect in the case of New Zealand.
  • Trade increased the relative value of the abundant factor, land in the case of New Zealand.
  • Globalisation benefited New Zealand.
  • Between 1870-1913:
    • 1/3 real wage growth from productivity;
    • 1/3 from improved terms of trade;
    • 1/3 from redistribution towards labour
  • Between 1890-1913 landowners gained most from trade.
  • Globalisation can have powerful and detrimental effects on income distribution, eg when land ownership is concentrated.
  • Globalisation creates opportunities, outcomes depend on factor endowments broadly defined, including skills and enterprise.
Last updated: 
Monday, 15 October 2007