Resource title

Labour Market Implications of a Compressed Wage Structure when Education and Training are Endogenous

Resource image

image for OpenScout resource :: Labour Market Implications of a Compressed Wage Structure when Education and Training are Endogenous

Resource description

We consider the economic implications of a compressed wage structurewhich is exogenously determined by institutions. An importantfeature of our analysis is that human capital is endogenous and canbe achieved either as formal education or as informal training withinfirms after entering the labour market. While institutional wage compressiondecreases the incentives of individuals to become educated, itincreases the incentives of firms to invest in training. As a result, thenet effects of wage compression on the aggregate human capital leveland GDP are ambiguous. Moreover, with wage compression, a skillbiasedtechnological change may cause wage inequality to decrease.Keywords: Wage compression, training, education, inequality, institutions,skill-biased technological change.JEL: I21, J31, J5, O33.

Resource author

Nikolaj Malchow-Møller, Jan Rose Skaksen

Resource publisher

Resource publish date

Resource language

eng

Resource content type

application/pdf

Resource resource URL

http://hdl.handle.net/10398/7574

Resource license

Check the according license before adaptation. When adapting give credits to the original author.