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Supply and demand, allocation and wage inequality: an international comparison

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  • Arnaud Dupuy
  • Lex Borghans

Abstract

An allocation model of workers differentiated by their field of study is developed to test whether international differences in the wage structure can be explained by differences in labour demand and supply in each country. The model explicitly takes into account the effects of supply and demand shifts on the allocation structure to disentangle country specific differences in the recruitment for one occupation from real supply-demand effects. Empirical results based on data for nine countries show that cross-country differences in wage inequality explain at least two-third of the differences in labour demand and supply.

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  • Arnaud Dupuy & Lex Borghans, 2005. "Supply and demand, allocation and wage inequality: an international comparison," Applied Economics, Taylor & Francis Journals, vol. 37(9), pages 1073-1088.
  • Handle: RePEc:taf:applec:v:37:y:2005:i:9:p:1073-1088
    DOI: 10.1080/00036840500076671
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    Cited by:

    1. Dupuy, A., 2006. "Measuring Skill-upgrading in the Dutch Labor Market," ROA Working Paper 003E, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    2. Dupuy Arnaud, 2006. "Measuring Skill-upgrading in the Dutch Labor Market," ROA Working Paper 003, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    3. Gabriel Montes Rojas, 2006. "Skill premia in Mexico: demand and supply factors," Applied Economics Letters, Taylor & Francis Journals, vol. 13(14), pages 917-924.

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    More about this item

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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