Skill asymmetries, increasing wage inequality and unemployment

No 2000-9, Economics Discussion Papers from School of Economics, Kingston University London

Abstract: Using a simple model with two levels of skill, we assume that high-skill workers who fail to get high-skill jobs may accept low-skill positions; low-skill workers do not have the analogous option of filling high-skill positions. This asymmetry implies that a slowdown in Hicks-neutral technical change (or other adverse, skill-neutral shocks) may cause an increase in wage inequality, both between and within skill categories, as well as an increase in unemployment, especially among low-skill workers. Movements in productivity, unemployment and inequality may thus be linked to included over-eduction and credentialism.

Keywords: wage inequality; unemployment; skill-bias; Hicks-neutral technical change; over-education; credentialism (search for similar items in EconPapers)
JEL-codes: E24 E25 J31 O33 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2000-10-02
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Skill Asymmetries, Increasing Wage Inequality and Unemployment
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Persistent link: https://EconPapers.repec.org/RePEc:ris:kngedp:2000_009

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