This paper examines the relationship between product demand and the pattern of rising skill premia and rising employment of skilled workers in the US and the UK since the 1980s. If more skilled workers demand more skill-intensive goods, then an increase in relative skill supply will also induce...

In this paper we investigate the importance of labor market institutions such as unemployment insurance, unions, firing regulation and minimum wages for the evolution of wage inequality across countries. We derive a simple log-linear equation of the wage differential as a function of the...

Many contributions suggest that earnings instability has increased during the 1980s and 1990s. This paper develops and estimates an on-the-job search model of the labor market to study the contribution of wage inequality and job mobility in explaining earnings instability. To study the evolution...

This paper develops a tractable empirical approach to estimate the effect of on-the-job tenure on the permanent and the transitory variance of earnings. The model is also used to evaluate earnings instability associated with fixed-term contracts (short-tenure contracts) in Italy. Our results...

We study the effect of tenure on earnings instability in Italy using two alternative estimation strategies. First we use a descriptive measure of earnings instability and fixed effects regressions. Second, we develop a formal model of earnings dynamics distinguishing permanent from transitory...