Occupational Choice and the E¤ects of Skill Supply on Relative Wages
AbstractIt is shown that an economy where agents with one dimensional skill choose among occupations as intermediate complementary inputs with di¤erent learning costs has an equilibrium hierarchy from the lowest cost/skill/wage occupations to the highest which agents will cascade along away from the skill level of new entrants. This can explain why di¤erently/similarly skilled agents act like comple- ments/substitutes. The distinction between lifetime wages including the learning cost and current wages implies a more elastic e¤ect of immigration, but a more inelastic e¤ect of the minimum wage. These conclusions don?t rely on the typical assumptions of scale, preferences, or comparative advantage.
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Bibliographic InfoPaper provided by U.S. Bureau of Labor Statistics in its series Working Papers with number 460.
Length: 27 pages
Date of creation: May 2013
Date of revision:
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Occupation; Occupational Choice; Skill; Occupational Training; Occupational Wage Differential; Wage Distriubtion; Relative Wages; Labor Complementarity;
Find related papers by JEL classification:
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-06-16 (All new papers)
- NEP-HRM-2013-06-16 (Human Capital & Human Resource Management)
- NEP-LAB-2013-06-16 (Labour Economics)
- NEP-LMA-2013-06-16 (Labor Markets - Supply, Demand, & Wages)
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