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Wage inequality and overeducation in a model with efficiency wages Author info | Abstract | Publisher info | Download info | Related research | Statistics Peter Skott () (University of Massachusetts Amherst)
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This paper shows that the existence and persistence of ‘overeducation’ can be explained by an extension of the efficiency wage model. When calibrated to fit the amounts of overeducation found in most empirical studies, the model implies that both the relative wage and the relative employment rate of high-skill workers depend inversely on aggregate economic activity. Keeping aggregate employment constant, furthermore, low-skill unemployment rises following an increase in the relative supply of high-skill labor, and relative wages may be insensitive to changes in relative labor supplies. The model may help explain rising wage inequality in some countries since the early 1970s. JEL Categories: J31
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Paper provided by University of Massachusetts Amherst, Department of Economics in its series Working Papers with number
2005-06.
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Date of creation: Feb 2005Date of revision:
Handle: RePEc:ums:papers:2005-06Contact details of provider: Postal: Thompson Hall, Amherst, MA 01003 Phone: (413)545-2590 Fax: (413)545-2921 Email: Web page: http://www.umass.edu/economics More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Peter Skott).
Keywords: Wage inequality overeducation efficiency wages. Other versions of this item:
This paper has been announced in the following NEP Reports :
References listed on IDEAS 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.: F Green & S McIntosh & A Vignoles, 1999.
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Sloane, P J & Battu, H & Seaman, P T, 1999.
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Peter Skott & Paul Auerbach, 2004.
"Wage inequality and skill asymmetries ,"
Working Papers
2004-03, University of Massachusetts Amherst, Department of Economics.
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Sicherman, Nachum, 1991.
""Overeducation" in the Labor Market ,"
Journal of Labor Economics ,
University of Chicago Press, vol. 9(2), pages 101-22, April.
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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.)
Schlicht, Ekkehart, 2007.
"Wage Dispersion and Overqualification as Entailed by Reder Competition ,"
Discussion Papers in Economics
1976, University of Munich, Department of Economics.
[Downloadable!]
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