Whodunnit? Changes in the relative demand for unskilled and skilled labor

Axel Schimmelpfennig

No 914, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: The secular shift in labor demand from unskilled to skilled labor is explained within a model that is solved numerically. There are three branches producing a basic good, a differentiated luxury good, and an intermediate service. Production is more skill-intensive in the luxury good and the service branch. Consumption expenditure shifts towards the luxury good with rising income. In this setting, both unskilled-specific and neutral technical change lead to a rise in the relative wage of the skilled. Increasing unemployment results only for a restrictive assumption about labor market rigidities.

Keywords: Skill-biased technical change; wages; unemployment (search for similar items in EconPapers)
JEL-codes: E24 J21 J31 (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:914

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