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Supply and demand, allocation and wage inequality: an international comparison

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  • Arnaud Dupuy
  • Lex Borghans

Abstract

An allocation model of workers differentiated by their field of study is developed to test whether international differences in the wage structure can be explained by differences in labour demand and supply in each country. The model explicitly takes into account the effects of supply and demand shifts on the allocation structure to disentangle country specific differences in the recruitment for one occupation from real supply-demand effects. Empirical results based on data for nine countries show that cross-country differences in wage inequality explain at least two-third of the differences in labour demand and supply.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 37 (2005)
Issue (Month): 9 ()
Pages: 1073-1088

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Handle: RePEc:taf:applec:v:37:y:2005:i:9:p:1073-1088

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Cited by:
  1. Dupuy Arnaud, 2006. "Measuring Skill-upgrading in the Dutch Labor Market," ROA Working Paper 003, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  2. Gabriel Montes Rojas, 2006. "Skill premia in Mexico: demand and supply factors," Applied Economics Letters, Taylor & Francis Journals, vol. 13(14), pages 917-924.

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