Supply and Demand Factors in Understanding the Educational Earnings Differentials: West Germany and the United States
AbstractThis paper uses data from the March Current Population Survey and German Socio-Economic Panel to investigate the role of market forces and the institutional constraints in explaining the educational earnings differentials in the United States and West Germany. We make use of simple supply and demand framework to differentiate the effects of market forces from wage-setting institutions. Results indicate that differential growth in the relative employment of skilled workers is responsible for the differences in returns to skill in both countries over the period of analysis. In particular, rising educational attainment is the major factor underlying the changes in the employment of skilled workers in each country and it is followed by institutional factors. However, in addition to the differential growth in relative demand for skilled labor, differences in wage-setting institutions explain most of the cross-country differences in skill premia. We also provide evidence for polarization of jobs which is a recent phenomenon in both labor markets.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Cattaneo University (LIUC) in its journal The European Journal of Comparative Economics.
Volume (Year): 8 (2011)
Issue (Month): 2 (December)
Contact details of provider:
Postal: Corso Matteotti 22 - Castellanza (VA) 21053
Phone: +39 (0)331-572 1
Fax: +39 (0)331-572 320
Web page: http://eaces.liuc.it/default.asp
More information through EDIRC
Earnings differentials; relative demand and supply of skills; skill premium; polarization.;
Find related papers by JEL classification:
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kohn, Karsten, 2006.
"Rising Wage Dispersion, After All! The German Wage Structure at the Turn of the Century,"
IZA Discussion Papers
2098, Institute for the Study of Labor (IZA).
- Kohn, Karsten, 2006. "Rising Wage Dispersion, After All ! The German Wage Structure at the Turn of the Century," ZEW Discussion Papers, ZEW - Zentrum fÃ¼r EuropÃ¤ische Wirtschaftsforschung / Center for European Economic Research 06-31, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 24(2), pages 235-270, April.
- Grabka, Markus M. & Schwarze, Johannes & Wagner, Gert G., 1999.
"How Unification and Immigration Affected the German Income Distribution,"
EconStor Open Access Articles,
ZBW - German National Library of Economics, pages 867-878.
- Grabka, Markus M. & Schwarze, Johannes & Wagner, Gert G., 1999. "How unification and immigration affected the German income distribution," European Economic Review, Elsevier, Elsevier, vol. 43(4-6), pages 867-878, April.
- Maarten Goos & Alan Manning, 2003.
"Lousy and Lovely Jobs: the Rising Polarization of Work in Britain,"
CEP Discussion Papers, Centre for Economic Performance, LSE
dp0604, Centre for Economic Performance, LSE.
- Maarten Goos & Alan Manning, 2007. "Lousy and Lovely Jobs: The Rising Polarization of Work in Britain," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 118-133, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Piero Cavaleri).
If references are entirely missing, you can add them using this form.