Unskilled Workers in an Economy with Skill-Biased Technology
This paper contributes to the search theory of unemployment by endogenously deriving matching functions and surplus sharing rule for skilled and unskilled workers from a wage-posting game. In contrast to previous wage posting models, here both sides of the market are heterogeneous and the resulted matching function can exhibit non-constant returns to scale. The model provides useful explanations for the observed dynamic patterns of within-skill and between-skill wage differentials in the 1970s and 1980s.
|Date of creation:||Apr 1999|
|Date of revision:|
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- Rios-Rull, Jose-Victor, 1993. "Working in the Market, Working at Home, and the Acquisition of Skills: A General-Equilibrium Approach," American Economic Review, American Economic Association, vol. 83(4), pages 893-907, September.
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"Bidding for Labour,"
dp98-03, Department of Economics, Simon Fraser University.
- Acemoglu, Daron & Shimer, Robert, 1999.
"Holdups and Efficiency with Search Frictions,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(4), pages 827-49, November.
- Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-81, September.
- Mortensen, Dale T, 1982. "Property Rights and Efficiency in Mating, Racing, and Related Games," American Economic Review, American Economic Association, vol. 72(5), pages 968-79, December.
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