Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence

Daron Acemoglu

American Economic Review, 1999, vol. 89, issue 5, 1259-1278

Abstract: I present a model where firms decide what types of jobs to create and then search for suitable workers. When there are few skilled workers and the skilled-unskilled productivity gap is small, firms create a single type of job and recruit all workers. An increase in the proportion of skilled workers or skill-biased technical change can create a qualitative change in the composition of jobs, increasing the demand for skills, wage inequality, and unemployment. I provide some evidence that there has been a change in the composition of jobs in the United States during the past two decades.

JEL-codes: J23 J31 J64 (search for similar items in EconPapers)
Date: 1999
Note: DOI: 10.1257/aer.89.5.1259
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Citations: View citations in EconPapers (413)

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Related works:
Working Paper: Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence (1998)
Working Paper: Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence (1996)
Working Paper: Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence (1996)
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