Employment and wage structures according to qualification levels and age groups * an empirical analysis on the basis of the IAB employment sample

Abstract

"This study examines empirically the relationship between employment and wage structures between and within qualification and age groups. First, the substitution elasticities between qualification and age groups are estimated and the changes in wages are determined that would have been necessary to halve the qualification-specific unemployment rate in 1997. The estimated substitution elasticities are very high. The necessary reduction in wages lies nominally between 9 % and 10.6 %, and turns out to be higher the lower the qualification level of the employee group. The second part of the study deals with the relationship between residual wage inequality and employment dynamics. Competing implications are derived from the marginal productivity theory of wages and search theory, and examined empirically. The findings support neither of the two theories. However, the robust result of a significantly positive correlation between the unemployment rate and the residual wage inequality suggests that search frictions can contribute to explaining the residual wage dispersion." (Author's abstract, IAB-Doku) ((en))

Cite article

Fitzenberger, B., Garloff, A. & Kohn, K. (2003): Beschäftigung und Lohnstrukturen nach Qualifikationen und Altersgruppen. Eine empirische Analyse auf Basis der IAB-Beschäftigtenstichprobe. In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Vol. 36, No. 4, p. 509-524.