Insights in the Job, Skill and Wage Structure of the Netherlands: 1986-98

The increase in the supply of relatively high-skilled workers since the 1960''s, recently accompanied by rapid technical change as a result of the introduction of new ICT’s, has increased the demand for high-skilled labour dramatically. In many countries this has led to a dramatic increase in the skilled workers wage premium. However, in the Netherlands wage dispersion is hardly observed. This paper shows why wages have been relatively stable in the Netherlands. Empirical analysis of a unique data set reveals that the increase in the demand for skills has been captured by a more efficient assignment of workers to jobs, not by increasing wage premiums.