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No Can Do? A Test of the Textbook Model of Labor Markets

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  • M. Goos

Abstract

This study exploits Britain~s expansion of its higher education system between 1988 and 1994 to show that the recent increase in college attaimnent growth rates has decreased college premiums for Britain's youngest workers. This is in line with the predictions from an adverse supply shock in a simple aggregate model of relative demand for and supply of college labor. Moreover, this paper conjec* tures that a simple demand-supply model can go a substantial distance towards explaining the variation in the UK economy-wide average return to college and overall wage inequality.

Suggested Citation

  • M. Goos, 2007. "No Can Do? A Test of the Textbook Model of Labor Markets," Review of Business and Economic Literature, KU Leuven, Faculty of Economics and Business (FEB), Review of Business and Economic Literature, vol. 0(2), pages 217-264.
    • Handle: RePEc:ete:revbec:20070202
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    1. David Card & Thomas Lemieux, 2001. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 705-746.
    2. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
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