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Noncognitive Abilities and Within-Group Wage Inequality

Author

Listed:
  • Egger, Hartmut

    () (University of Bayreuth)

  • Grossmann, Volker

    () (University of Fribourg)

Abstract

This paper argues that endogenous restructuring processes within firms towards productivityenhancing human resource activities, triggered by advances in information and communication technologies (ICT) and rising supply of educated workers, are typically associated with higher demand for noncognitive abilities. Consistent with the evolution of the distribution of wages in advanced countries, this raises within-group wage inequality, possibly accompanied by a decline or stagnation of between-group wage dispersion. The mechanisms proposed in this research are consistent with empirical evidence on both the evolution of work-force composition in firms and the complementarity between skill-upgrading, new technologies and knowledge-based work organization.

Suggested Citation

  • Egger, Hartmut & Grossmann, Volker, 2004. "Noncognitive Abilities and Within-Group Wage Inequality," IZA Discussion Papers 1024, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp1024
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    within-group wage inequality; human resource activities; noncognitive abilities;

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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