Wages and employment across skill groups

Abstract

"This book explores empirically for West Germany whether a decline in the relative demand for less skilled workers resulted in increased unemployment. Using up-to-date econometric techniques, a balanced mixture between descriptive evidence und structural estimation is conventional wisdom about labour market trends in West Germany. Overall, wage dispersion has been increasing, an wage growth has been higher for low-skilled and high-skilled workers compared to the medium skill group. A skill bias in labor demand trends is found and higher wage flexibility could have alleviated the dispersion in unemployment rates across skill groups. The main driving force appears to be technological progress, hoever, the evidence is also consistent with international trade causing a deterioration in the labor market position of low-skilled workers. With regard to wage bargaining, evidence for a short run but not for a long run, moderation of wage demands is found in the presence of a negative labor demand shock." (Author's abstract, IAB-Doku)((en))

Cite article

Fitzenberger, B. (1999): Wages and employment across skill groups. An analysis for West Germany. (ZEW economic studies 06), Heidelberg: Physica-Verl., 251 p.