This paper develops a simple framework for examining human capital accumulation, unemployment, and relative wages in a … global economy. It builds on the models of Davis (1998a, b) of trade between a flexible-wage America and a rigid-wage Europe …, technical change, and a productivity slowdown. We derive the consequences for the skilled-to unskilled wage gap, unemployment …

their less educated peers. We argue that on-the-job training, being complementary to formal education, is the reason for …