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Skill supply, supervision requirements and unemployment of low-skilled labor


Falkinger, Josef; Grossmann, Volker (2001). Skill supply, supervision requirements and unemployment of low-skilled labor. International Journal of Manpower, 22(1/2):69-83.

Abstract

This paper presents a model with flexible wages in which unemployment of low-skilled labor is possible in equilibrium, whereas high-skilled workers are fully employed. Thus, the model can explain why even in countries with flexible labor markets and full employment of skilled labor an employment problem exists at the bottom of the skill spectrum. The model is used to evaluate the impact of technological change and increased skill supply on the employment of low-skilled workers. It is shown that a switch to technologies with higher skill requirements unambiguously leads to a rise in unemployment of low-skilled workers. An increase in the supply of high-skilled labor has a positive effect on the employment level of low-skilled labor.

This paper presents a model with flexible wages in which unemployment of low-skilled labor is possible in equilibrium, whereas high-skilled workers are fully employed. Thus, the model can explain why even in countries with flexible labor markets and full employment of skilled labor an employment problem exists at the bottom of the skill spectrum. The model is used to evaluate the impact of technological change and increased skill supply on the employment of low-skilled workers. It is shown that a switch to technologies with higher skill requirements unambiguously leads to a rise in unemployment of low-skilled workers. An increase in the supply of high-skilled labor has a positive effect on the employment level of low-skilled labor.

Citations

4 citations in Web of Science®
4 citations in Scopus®
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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:2001
Deposited On:11 Feb 2008 12:21
Last Modified:05 Apr 2016 12:17
Publisher:Emerald
ISSN:0143-7720
Publisher DOI:10.1108/01437720110386395
Related URLs:http://www.emeraldinsight.com/Insight/viewContentItem.do?contentType=Article&contentId=848294

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