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The Low-Skill, Bad-Job Trap

Author

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  • Snower, Dennis J.

Abstract

The paper explains how a country can fall into a 'low-skill, bad-job trap', in which workers acquire insufficient training and firms provide insufficient skilled vacancies. In particular, the paper argues that in countries where a large proportion of the workforce is unskilled, firms have little incentive to provide good jobs (requiring high skills and providing high wages), and if few good jobs are available, workers have little incentive to acquire skills. In this context, the paper examines the need for and effectiveness of training policy, and provides a possible explanation for why Western countries have responded so differently to the broad-based shift in labour demand from unskilled to skilled labour.

Suggested Citation

  • Snower, Dennis J., 1994. "The Low-Skill, Bad-Job Trap," CEPR Discussion Papers 999, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:999
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    Citations

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    Cited by:

    1. Cihan Bilginsoy, 2005. "Delivering Skills: Apprenticeship Program Sponsorship and Transition from Training," Working Paper Series, Department of Economics, University of Utah 2005_01, University of Utah, Department of Economics.
    2. Stephane Mahuteau & P.N.(Raja) Junankar, 2004. "Do Migrants get Good Jobs? New Migrant Settlement in Australia," Econometric Society 2004 Australasian Meetings 150, Econometric Society.
    3. Gabszewicz, J. & Turrini, A., 2000. "Workers' skills, product quality and industry equilibrium," International Journal of Industrial Organization, Elsevier, vol. 18(4), pages 575-593, May.
    4. Maria Rosaria Carillo, 2000. "The Effect of Professionalisation and the Demand for Social Status on the Adoption of New Technologies," Rivista italiana degli economisti, Società editrice il Mulino, issue 3, pages 473-502.
    5. Nick Adnett, "undated". "Competition in the School Curriculum: the economic and policy context in the UK," Working Papers 001, Staffordshire University, Business School.
    6. Ardiana N. Gashi & Geoff Pugh & Nick Adnett, 2008. "Technological change and employer-provided training: Evidence from German establishments," Economics of Education Working Paper Series 0026, University of Zurich, Department of Business Administration (IBW).
    7. Charlot, Olivier & Decreuse, Bruno, 2010. "Over-education for the rich, under-education for the poor: A search-theoretic microfoundation," Labour Economics, Elsevier, vol. 17(6), pages 886-896, December.
    8. Monfort, Philippe & Ottaviano, Gianmarco, 2002. "Spatial Mismatch and Skill Accumulation," CEPR Discussion Papers 3324, C.E.P.R. Discussion Papers.
    9. Ricardo Azevedo Araujo & Helmar Nunes Moreira, 2014. "Lyapunov stability in an evolutionary game theory model of the labour market," Economia, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics], vol. 15(1), pages 41-53.
    10. Diane Aubert & Mireille Chiroleu-Assouline, 2017. "Environmental Tax Reform and Income Distribution with Imperfect Heterogeneous Labour Markets," CESifo Working Paper Series 6498, CESifo Group Munich.
    11. Stephan, Johannes, 2002. "Industrial Specialisation and Productivity Catch-Up in CEECs - Patterns and Prospects -," IWH Discussion Papers 166, Halle Institute for Economic Research (IWH).
    12. Luigi Bonatti, 2003. "'Soft' growth and the role of monetary policy in selecting the long-run equilibrium path," Working Papers (-2012) 0306, University of Bergamo, Department of Economics.
    13. Luigi Bonatti, 1999. "Growth, real interest, employment and wage determination," Department of Economics Working Papers 9907, Department of Economics, University of Trento, Italia.
    14. Kaltenborn, Bruno & Klös, Hans-Peter, 2000. "Arbeitmarktstatus- und Lohnmobilität in Westdeutschland 1984/96," IW-Trends – Vierteljahresschrift zur empirischen Wirtschaftsforschung, Institut der deutschen Wirtschaft Köln (IW) / Cologne Institute for Economic Research, vol. 27(2), pages 24-45.
    15. Zuzana Brixiova & Wenli Li, 1998. "Skill Acquisition and Private Firm Creation in Transition Economies," William Davidson Institute Working Papers Series 162, William Davidson Institute at the University of Michigan.
    16. Erol Taymaz, 2009. "Informality and Productivity: Productivity Differentials between Formal and Informal Firms in Turkey," ERC Working Papers 0901, ERC - Economic Research Center, Middle East Technical University, revised Mar 2009.
    17. William Blankenau & Gabriele Camera, 2006. "A Simple Economic Theory of Skill Accumulation and Schooling Decisions," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 9(1), pages 93-115, January.
    18. Dr Johannes Stephan, 2004. "Evolving Structural Patterns in the Enlarging European Division of Labour: Sectoral and Branch Specialisation and the Potentials for Closing the Productivity Gap," Development and Comp Systems 0403003, EconWPA.
    19. Sauro Mocetti, 2004. "Social Protection and Human Capital: Test of a Hypothesis," Department of Economics University of Siena 425, Department of Economics, University of Siena.

    More about this item

    Keywords

    Employment; Productivity; Search; Skills; Training; Vacancies;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • 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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