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Low-Skilled Unemployment, Biased Technological Shocks and Job Competition Author info | Abstract | Publisher info | Download info | Related research | Statistics Pierrard, Olivier (IRES, Catholic University of Louvain)
Sneessens, Henri R. () (IRES, Catholic University of Louvain, Catholic University of Lille and IZA Bonn)
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The unemployment rise in EU countries has been particularly strong for low-skilled workers. This observation has often been explained in terms of biased technical change and relative wage rigidities. More attention has been paid recently to an alternative mechanism, the crowding-out of low-skilled workers by over-qualified workers. The objective of this paper is both methodological and empirical. We construct a dynamic general equilibrium model with two types of jobs and two types of workers and with search unemployment. The model is calibrated and simulated to examine the interactions between the “skill bias” and “crowdingout” mechanisms. When such interactions are accounted for, the model reproduces quite well the observed unemployment changes.
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number
784.
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Length: 32 pages
Date of creation: May 2003Date of revision:
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Keywords: skill bias equilibrium search unemployment ladder effect crowding out over-education Other versions of this item:
Find related papers by JEL classification: E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
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references 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.)
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