Skill Premiums and the Supply of Young Workers in Germany

Albrecht Glitz and Daniel Wissmann

Labour Economics, 2021, vol. 72, issue C

Abstract: In this paper, we study the development and underlying drivers of skill premiums in Germany between 1980 and 2008. We show that the significant increase in the medium-to-low skill premium since the late 1980s was almost exclusively concentrated among workers aged 30 or below. Using a nested CES production function framework which allows for imperfect substitutability between young and old workers, we show that changes in relative labor supplies can explain these patterns very well. A cohort-level analysis reveals that distinct secular changes in the educational attainment of the native population are the primary source of the declining relative supply of medium-skilled workers in Germany. Low-skilled immigration, in contrast, only plays a secondary role in explaining the rising lower-end wage inequality in Germany over recent decades.

Keywords: Cohorts; Baby Boom; Labor Supply; Labor Demand; Skill-biased Technological Change; Wage Distribution; Wage Differentials (search for similar items in EconPapers)
JEL-codes: J11 J21 J22 J31 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0927537121000695
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:72:y:2021:i:c:s0927537121000695

DOI: 10.1016/j.labeco.2021.102034

Access Statistics for this article

Labour Economics is currently edited by A. Ichino

More articles in Labour Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().