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Wage Dispersion, Over-Qualification, and Reder Competition

Ekkehart Schlicht ()

Economics - The Open-Access, Open-Assessment E-Journal, 2007, vol. 1, pages 1-22

Abstract: The expansion of higher education in the Western countries has been accompanied by a marked widening of wage differentials and increasing over-qualification. While the increase in wage differentials has been attributed to skill-biased technological change that made advanced skills scarce, this explanation does not fit well with the observed increase in over-qualification which suggests that advanced skills are in excess supply. By "Reder-competition" I refer to the simultaneous adjustment of wage offers and hiring standards in response to changing labor market conditions. I present a simple model of Reder competition that depicts wages as driven by labor heterogeneity, rather than scarcity. The mechanism may give rise to a simultaneous increase in wage differentials and over-qualification.

Keywords: Hiring standards; employment criteria; selection wages; efficiency wages; mobility; skillbiased technological change; heterogeneity-biased technological change; over-qualification; over-education; wage dispersion; Reder competition (search for similar items in EconPapers)
JEL-codes: J31 J63 D43 (search for similar items in EconPapers)
Date: 2007
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http://dx.doi.org/10.5018/economics-ejournal.ja.2007-13
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Related works:
Journal Article: Wage Dispersion, Over-Qualification, and Reder Competition (2007) Downloads
Working Paper: Wage Dispersion and Overqualification as Entailed by Reder Competition (2007) Downloads
Working Paper: Wage Dispersion and Overqualification as Entailed by Reder Competition (2007) Downloads
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