Unskilled Workers in an Economy with Skill-Biased Technology
AbstractThis paper contributes to the search theory of unemployment by endogenously deriving matching functions and surplus sharing rule for skilled and unskilled workers from a wage-posting game. In contrast to previous wage posting models, here both sides of the market are heterogeneous and the resulted matching function can exhibit non-constant returns to scale. The model provides useful explanations for the observed dynamic patterns of within-skill and between-skill wage differentials in the 1970s and 1980s.
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Bibliographic InfoPaper provided by Queen's University, Department of Economics in its series Working Papers with number 987.
Length: 51 pages
Date of creation: Apr 1999
Date of revision:
Wage posting; Wage differential; Matching; Technological progress;
Other versions of this item:
- Shouyong Shi, 1999. "Unskilled workers in an economy with skill-biased technology," Working Paper Series WP-99-5, Federal Reserve Bank of Chicago.
- 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.
- 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.:
- Daron Acemoglu & Robert Shimer, 1998.
"Holdups and Efficiency with Search Frictions,"
98-14, Massachusetts Institute of Technology (MIT), Department of Economics.
- Rios-Rull, Jose-Victor, 1993. "Working in the Market, Working at Home, and the Acquisition of Skills: A General-Equilibrium Approach," American Economic Review, American Economic Association, vol. 83(4), pages 893-907, September.
- Benoit Julien & John Kennes & Ian King, 2000.
"Bidding for Labor,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 3(4), pages 619-649, October.
- Mortensen, Dale T, 1982. "Property Rights and Efficiency in Mating, Racing, and Related Games," American Economic Review, American Economic Association, vol. 72(5), pages 968-79, December.
- Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-81, September.
- Shouyong Shi, 2000. "The Research Agenda: Search Theory beyond the Matching Function," EconomicDynamics Newsletter, Review of Economic Dynamics, vol. 1(2), April.
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