IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Low-Skilled Unemployment, Biased Technological Shocks and Job Competition

  • Pierrard, Olivier


    (Central Bank of Luxembourg)

  • Sneessens, Henri R.


    (University of Luxembourg)

The unemployment rise in EU countries has been particularly strong for low-skilled workers. This observation has often been explained in terms of biased technical change and relative wage rigidities. More attention has been paid recently to an alternative mechanism, the crowding-out of low-skilled workers by over-qualified workers. The objective of this paper is both methodological and empirical. We construct a dynamic general equilibrium model with two types of jobs and two types of workers and with search unemployment. The model is calibrated and simulated to examine the interactions between the “skill bias” and “crowdingout” mechanisms. When such interactions are accounted for, the model reproduces quite well the observed unemployment changes.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 784.

in new window

Length: 32 pages
Date of creation: May 2003
Date of revision:
Handle: RePEc:iza:izadps:dp784
Contact details of provider: Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page:

Order Information: Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

References listed on IDEAS
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.:

as in new window
  1. A. Gautier, Pieter & J. van den Berg, Gerard & C. van Ours, Jan & Ridder, Geert, 2002. "Worker turnover at the firm level and crowding out of lower educated workers," European Economic Review, Elsevier, vol. 46(3), pages 523-538, March.
  2. Dolado, Juan J. & Jansen, Marcel & Jimeno, Juan F, 2002. "A Matching Model of Crowding-Out and On-the-Job Search (with an Application to Spain)," CEPR Discussion Papers 3466, C.E.P.R. Discussion Papers.
  3. repec:oup:qjecon:v:113:y:1998:i:4:p:1245-1279 is not listed on IDEAS
  4. Daron Acemoglu, 1998. "Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence," NBER Working Papers 6658, National Bureau of Economic Research, Inc.
  5. James Albrecht & Susan Vroman, 2000. "A Matching Model with Endogenous Skill Requirements," Econometric Society World Congress 2000 Contributed Papers 0774, Econometric Society.
  6. Marimon, Ramon & Zilibotti, Fabrizio, 1998. "Unemployment vs. Mismatch of Talents: Reconsidering Unemployment Benefits," Seminar Papers 661, Stockholm University, Institute for International Economic Studies.
  7. Stephen Machin & John Van Reenen, 1998. "Technology and changes in skill structure: evidence from seven OECD countries," IFS Working Papers W98/04, Institute for Fiscal Studies.
  8. repec:oup:qjecon:v:113:y:1998:i:4:p:1169-1213 is not listed on IDEAS
  9. Marco Manacorda & Barbara Petrongolo, 1996. "Skill Mismatch and Unemployment in OECD Countries," CEP Discussion Papers dp0307, Centre for Economic Performance, LSE.
  10. Fabrice Collard & Raquel Fonseca & Rafael Muñoz, 2003. "Spanish Unemployment Persistence and the Ladder Effect," CSEF Working Papers 106, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  11. Dolado, Juan J. & Felgueroso, Florentino & Jimeno, Juan F., 2000. "Youth labour markets in Spain: Education, training, and crowding-out," European Economic Review, Elsevier, vol. 44(4-6), pages 943-956, May.
  12. Mortensen, Dale T & Pissarides, Christopher A, 1999. "Unemployment Responses to 'Skill-Biased' Technology Shocks: The Role of Labour Market Policy," Economic Journal, Royal Economic Society, vol. 109(455), pages 242-65, April.
  13. repec:oup:qjecon:v:113:y:1998:i:4:p:1215-1244 is not listed on IDEAS
  14. Cockx, Bart & Dejemeppe, Muriel, 2002. "Do the Higher Educated Unemployed Crowd Out the Lower Educated Ones in a Competition for Jobs?," IZA Discussion Papers 541, Institute for the Study of Labor (IZA).
  15. Merz, Monika, 1995. "Search in the labor market and the real business cycle," Journal of Monetary Economics, Elsevier, vol. 36(2), pages 269-300, November.
  16. Hartog, Joop, 2000. "Over-education and earnings: where are we, where should we go?," Economics of Education Review, Elsevier, vol. 19(2), pages 131-147, April.
  17. Paul Beaudry & David Green, 1998. "What is Driving US and Canadian Wages: Exogenous Technical Change or Endogenous Choice of Technique?," NBER Working Papers 6853, National Bureau of Economic Research, Inc.
  18. repec:oup:qjecon:v:113:y:1998:i:4:p:1055-1089 is not listed on IDEAS
  19. repec:tpr:qjecon:v:113:y:1998:i:4:p:1215-1244 is not listed on IDEAS
  20. Van der Linden, Bruno & Dor, Eric, 2001. "Labor Market Policies and Equilibrium Employment : Theory and Application for Belgium," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2001005, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  21. Andolfatto, David, 1996. "Business Cycles and Labor-Market Search," American Economic Review, American Economic Association, vol. 86(1), pages 112-32, March.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp784. 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: (Mark Fallak)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.