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

Josef Falkinger (University of Zurich, Zurich, Switzerland)
Volker Grossmann (University of Zurich, Zurich, Switzerland)

International Journal of Manpower

ISSN: 0143-7720

Article publication date: 1 February 2001

1786

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.

Keywords

Citation

Falkinger, J. and Grossmann, V. (2001), "Skill supply, supervision requirements and unemployment of low‐skilled labor", International Journal of Manpower, Vol. 22 No. 1/2, pp. 69-83. https://doi.org/10.1108/01437720110386395

Publisher

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MCB UP Ltd

Copyright © 2001, MCB UP Limited

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