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Rising Skill Premia: You ain't seen nothing yet?

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Author Info
Richard Nahuis
Henri de Groot ()

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Abstract

Increases in income difference between low and high-skilled workers are likely to affect welfare state policies in upcoming decades. Demand for redistribution puts pressure on marginal income-tax rates and other social security measures.

We come to this conclusion by confronting expected supply and demand for skill. If demand for skill continues to increase at the pace of the last decades, supply has to keep up its high rate of growth of the last decades too. A priori, the former is plausible, the latter is not. This paper makes this point and sketches the major uncertainties surrounding the underlying trends.

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Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Papers with number 20.

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Handle: RePEc:cpb:discus:20

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Related research
Keywords: Inequality; Policy; Social Security; Cross-country comparison;

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Find related papers by JEL classification:
I28 - Health, Education, and Welfare - - Education - - - Government Policy
H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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References listed on IDEAS
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Cited by:
(explanations, 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.)

  1. Wim Suyker & Henri de Groot, 2006. "China and the Dutch Economy, Stylised facts and prospects," CPB Documents 127, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  2. Wim Suyker & Henri L.F. de Groot & Piet Buitelaar & Jos Ebregt & Stefan Groot & Jan Möhlmann & Hugo Rojas-Romagosa & Bas Straathof, 2007. "India and the Dutch economy," CPB Documents 155, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  3. Richard Nahuis & Henry van der Wiel, 2005. "How Should Europe's ICT Ambitions look like? An Interpretative Review of the Facts," Working Papers 05-22, Utrecht School of Economics. [Downloadable!]
  4. Henri L.F. de Groot & Paul J.G. Tang & Richard Nahuis, 2004. "Is the American Model Miss World? Choosing between the Anglo-Saxon model and a European-style alternative," Working Papers 04-26, Utrecht School of Economics. [Downloadable!]
    Other versions:
  5. Matthias Weiss, 2004. "Skill-Biased Technological Change: Is there Hope for the Unskilled?," MEA discussion paper series 04045, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
    Other versions:
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