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Macroeconomic implications of shifts in the relative demand for skills

  • Olivier Blanchard

Besides widening wage inequality, if the demand for skills continues to increase it will probably reduce aggregate employment. Policy measures to offset the impact of increased demand for skills on wage inequality and employment would be very costly. Moreover, given local funding of primary and secondary education a sufficiently large supply response cannot be assumed.

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Article provided by Federal Reserve Bank of New York in its journal Economic Policy Review.

Volume (Year): (1995)
Issue (Month): Jan ()
Pages: 48-53

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Handle: RePEc:fip:fednep:y:1995:i:jan:p:48-53:n:v.1.no.1
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  1. Katz, Lawrence F & Murphy, Kevin M, 1992. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 35-78, February.
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