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Supply and Demand, Allocation and Wage Inequality: An International Comparison

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Author Info
Dupuy,Arnaud
Borghans,Lex (ROA rm)

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Abstract

In this paper, we develop an allocation model of workers differentiated by their field of study to test whether international differences in the wage structure can be explained by differences in labor demand and supply in each country. The model explicitly takes into account the effects of supply an 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 2/3 of the differences in labor demand and supply.

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Paper provided by Maastricht : ROA, Researchcentrum voor Onderwijs en Arbeidsmarkt in its series Research Memoranda with number 009.

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Date of creation: 2003
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Handle: RePEc:dgr:umaror:2003009

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Keywords: education training and the labour market

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  3. Edwin Leuven & Hessel Oosterbeek & Hans van Ophem, 2004. "Explaining international differences in male skill wage differentials by differences in demand and supply of skill," Economic Journal, Royal Economic Society, vol. 114(495), pages 466-486, 04. [Downloadable!] (restricted)
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  5. Blau, Francine D & Kahn, Lawrence M, 1996. "International Differences in Male Wage Inequality: Institutions versus Market Forces," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 791-836, August. [Downloadable!] (restricted)
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  6. Evans, Graham J & Lindley, Robert M, 1973. " The Use of RAS and Related Models in Manpower Forecasting," Economic Change and Restructuring, Springer, vol. 13(1-2), pages 53-73.
  7. van Eijs, Patrick & Borghans, Lex, 1996. "The use of RAS in manpower forecasting: A microeconomic approach," Economic Modelling, Elsevier, vol. 13(2), pages 257-287, April. [Downloadable!] (restricted)
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  10. MacDonald, Glenn M, 1982. "A Market Equilibrium Theory of Job Assignment and Sequential Accumulation of Information," American Economic Review, American Economic Association, vol. 72(5), pages 1038-55, December. [Downloadable!] (restricted)
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  14. Freeman, Richard & Schettkat, Ronald, 2001. "Skill Compression, Wage Differentials, and Employment: Germany vs the US," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 582-603, July.
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  15. Nickell, Stephen & Bell, Brian, 1996. "Changes in the Distribution of Wages and Unemployment in OECD Countries," American Economic Review, American Economic Association, vol. 86(2), pages 302-08, May. [Downloadable!] (restricted)
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  19. David Card & Thomas Lemieux, 2000. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," NBER Working Papers 7655, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  20. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed The Labor Market?," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1169-1213, November. [Downloadable!] (restricted)
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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. Dupuy Arnaud, 2006. "Measuring Skill-upgrading in the Dutch Labor Market," Working Papers 003, Maastricht : ROA, Researchcentrum voor Onderwijs en Arbeidsmarkt. [Downloadable!]
  2. Gabriel Montes Rojas, 2006. "Skill premia in Mexico: demand and supply factors," Applied Economics Letters, Taylor and Francis Journals, vol. 13(14), pages 917-924, November. [Downloadable!] (restricted)
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