Wage inequality and skill asymmetries

Peter Skott and Paul Auerbach ()
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Peter Skott: University of Aarhus

UMASS Amherst Economics Working Papers from University of Massachusetts Amherst, Department of Economics

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 an adverse, skill-neutral shock to aggregate employment 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 induced overeducation and credentialism.

Keywords: wage inequality; unemployment; skill-bias; overeducation (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (5)

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