The paper formalises the interaction between active labour market programmes and ordinary higher education in a general equilibrium framework. Both education in prorgammes and ordinary higher education serve to increase the supply of high-skilled labour. The model features a dual labour market...

Income inequality has been increasing in Sweden for more than two decades. Since 1981, the skill premium has risen by 20 percent for the economy as a whole and by as much as 30 percent for men working in the private sector. At the same time, the supply of skilled workers has grown by 20 percent....