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Have the relative employment prospects for the low-skilled deteriorated after all?

  • Knut Røed

    ()

  • Morten Nordberg

    ()

Has the relative unemployment propensity for the low-skilled increased during the 1990’s? We address this question empirically, based on two notions of ‘low skills’; i) low education, and ii) low ability, conditioned on education and work experience. Ability is identified by previous earnings. Evaluated by the education-based measure, we find that unemployment propensity has not developed unfavourably for the low-skilled. Evaluated by the ability-based measure, it has. We uncover a steady deterioration of employment prospects for persons with low ability relative to others with similar formal qualifications. The adverse employment effects of being low-skilled are stronger the higher is formal education. Copyright Springer-Verlag 2004

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File URL: http://hdl.handle.net/10.1007/s00148-003-0120-y
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Article provided by Springer in its journal Population Economics.

Volume (Year): 17 (2004)
Issue (Month): 1 (February)
Pages: 67-82

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Handle: RePEc:spr:jopoec:v:17:y:2004:i:1:p:67-82
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  1. Layard, R. & Nickell, S., 1991. "Unemployment in the OECD Countries," Economics Series Working Papers 99130, University of Oxford, Department of Economics.
  2. Daniel Cohen & Arnaud Lefranc & Gilles Saint-Paul, 1997. "French unemployment: a transatlantic perspective," Economic Policy, CEPR;CES;MSH, vol. 12(25), pages 265-292, October.
  3. Marco Manacorda & Barbara Petrongolo, 1996. "Skill Mismatch and Unemployment in OECD Countries," CEP Discussion Papers dp0307, Centre for Economic Performance, LSE.
  4. Richard Jackman & Richard Layard & Marco Manacorda & Barbara Petrongolo, 1997. "European versus US Unemployment: Different Responses to Increased Demand for skill?," CEP Discussion Papers dp0349, Centre for Economic Performance, LSE.
  5. Paul Krugman, 1994. "Past and prospective causes of high unemployment," Economic Review, Federal Reserve Bank of Kansas City, issue Q IV, pages 23-43.
  6. Narendranathan, W & Stewart, Mark B, 1993. "How Does the Benefit Effect Vary as Unemployment Spells Lengthen?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 8(4), pages 361-81, Oct.-Dec..
  7. Nickell, Stephen & Bell, Brian, 1995. "The Collapse in Demand for the Unskilled and Unemployment across the OECD," Oxford Review of Economic Policy, Oxford University Press, vol. 11(1), pages 40-62, Spring.
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