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Rising skill premia; you ain't seen nothing yet?

Richard Nahuis and Henri de Groot ()

CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: Increases in inequality between low and high-skilled workers are likely to affect welfare state policies in upcoming decades. Demand for redistribution puts pressure on marginal income-tax rates and other social security measures. We come to this conclusion by confronting expected supply and demand for skill. If demand for skill continues to increase at the pace of the last decades, supply has to keep up its high rate of growth of the last decades too. A priori, the former is plausible, the latter is not. This paper makes this point and sketches the major uncertainties surrounding the underlying trends.

JEL-codes: I28 H24 J31 J38 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu, nep-lab and nep-pbe
Date: 2003-07
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