Wage Dispersion and Overqualification as Entailed by Reder Competition

Ekkehart Schlicht

No 2007-22, Economics Discussion Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: The expansion of higher education in theWestern countries has been accompanied by a marked widening of wage differentials and increasing overqualification. 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 overqualification 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 condition. I present a simple model of Reder competition that reproduces the simultaneous increase in wage differentials and overqualification in response to an increase in education.

Keywords: Hiring standards; employment criteria; selection wages; efficiency wages; mobility; skillbiased technical change; overeducation; wage dispersion (search for similar items in EconPapers)
JEL-codes: D43 J31 J63 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-bec
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https://www.econstor.eu/bitstream/10419/17945/1/dp2007-22.pdf (application/pdf)

Related works:
Journal Article: Wage Dispersion, Over-Qualification, and Reder Competition (2007)
Journal Article: Wage Dispersion, Over-Qualification, and Reder Competition (2007)
Working Paper: Wage Dispersion and Overqualification as Entailed by Reder Competition (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:5727

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