Supply and Demand Factors in Understanding the Educational Earnings Differentials: West Germany and the United States
This paper uses data from the March Current Population Survey and German Socio-Economic Panel to investigate the role of market forces and the institutional constraints in explaining the educational earnings differentials in the United States and West Germany. We make use of simple supply and demand framework to differentiate the effects of market forces from wage-setting institutions. Results indicate that differential growth in the relative employment of skilled workers is responsible for the differences in returns to skill in both countries over the period of analysis. In particular, rising educational attainment is the major factor underlying the changes in the employment of skilled workers in each country and it is followed by institutional factors. However, in addition to the differential growth in relative demand for skilled labor, differences in wage-setting institutions explain most of the cross-country differences in skill premia. We also provide evidence for polarization of jobs which is a recent phenomenon in both labor markets.
Volume (Year): 8 (2011)
Issue (Month): 2 (December)
|Contact details of provider:|| Postal: Corso Matteotti 22 - Castellanza (VA) 21053|
Phone: +39 (0)331-572 1
Fax: +39 (0)331-572 320
Web page: http://eaces.liuc.it/default.asp
More information through EDIRC
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.:
- Kohn, Karsten, 2006.
"Rising Wage Dispersion, After All! The German Wage Structure at the Turn of the Century,"
IZA Discussion Papers
2098, Institute for the Study of Labor (IZA).
- Kohn, Karsten, 2006. "Rising Wage Dispersion, After All ! The German Wage Structure at the Turn of the Century," ZEW Discussion Papers 06-31, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 235-270, April.
- Grabka, Markus M. & Schwarze, Johannes & Wagner, Gert G., 1999. "How Unification and Immigration Affected the German Income Distribution," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 867-878.
- Grabka, Markus M. & Schwarze, Johannes & Wagner, Gert G., 1999. "How unification and immigration affected the German income distribution," European Economic Review, Elsevier, vol. 43(4-6), pages 867-878, April.
- Maarten Goos & Alan Manning, 2007. "Lousy and Lovely Jobs: The Rising Polarization of Work in Britain," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 118-133, February.
- Maarten Goos & Alan Manning, 2003. "Lousy and lovely jobs: the rising polarization of work in Britain," LSE Research Online Documents on Economics 20002, London School of Economics and Political Science, LSE Library.
- Maarten Goos & Alan Manning, 2003. "Lousy and Lovely Jobs: the Rising Polarization of Work in Britain," CEP Discussion Papers dp0604, Centre for Economic Performance, LSE.
When requesting a correction, please mention this item's handle: RePEc:liu:liucej:v:8:y:2011:i:2:p:235-263. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Piero Cavaleri)
If references are entirely missing, you can add them using this form.