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

Skill supply, supervision requirements and unemployment 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Manpower Emerald Publishing

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

Josef Falkinger; Volker Grossmann
International Journal of Manpower , Volume 22 (1/2): 15 – Feb 1, 2001
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References (18)

Publisher
Emerald Publishing
Copyright
Copyright © 2001 MCB UP Ltd. All rights reserved.
ISSN
0143-7720
DOI
10.1108/01437720110386395
Publisher site
See Article on Publisher Site

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.

Journal

International Journal of Manpower – Emerald Publishing

Published: Feb 1, 2001

Keywords: Labour; Supervision; Unemployment

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