Unskilled workers in an economy with skill-biased technology
AbstractThis paper contributes to the search theory of unemployment by endogenously generating matching functions for skilled and unskilled workers from a wage-posting game. The model is capable of producing a positive skill premium and a positive wage differential among homogenous unskilled workers. The skill premium arises from a skill-biased technology; the wage differential among unskilled workers sustains because a lower wage is compensated by a higher change of getting the job. The model provides useful explanations for the observed dynamics patterns of within-skill and between-skill wage differentials in the 1970s and 1980s and for the relative cyclical volatility of hours of worker by different skill groups of workers.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Chicago in its series Working Paper Series with number WP-99-5.
Date of creation: 1999
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Other versions of this item:
- Shouyong Shi, 1998. "Unskilled Workers in an Economy with Skill-Biased Technology," Cahiers de recherche CREFE / CREFE Working Papers 73, CREFE, Université du Québec à Montréal.
- Shouyong Shi, 1999. "Unskilled Workers in an Economy with Skill-Biased Technology," Working Papers 987, Queen's University, Department of Economics.
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
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.:
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