When types of workers are imperfect substitutes, the Mincerian rate to return to human capital is negatively related to the supply of human capital. We work out a simple model for the joint evolution of output and wage dispersion. We estimate this model using cross-country panel data on GDP and...

At the turn of the millennium three frequently cited potential causes of new challenges for wage policy in Germany are revisited in this study: skill-biased technological progress, the increasing international integration of labor and product markets, and the monetary integration of the EMU....

We analyze some macroeconomic implications that follow from the fact that people tend to consume higher-quality goods as their incomes rise. The model involves two sectors: one producing a homogeneous good and the other producing a product with variable levels of quality. Both sectors use...

Feenstra and Hanson (1997) have argued in the context of the North American Free Trade Agreement that US outsourcing to Mexico leads to an increase in the skill premium in both the US and Mexico. In this paper we show on the example of Austria and Poland that with the new international division...

In this paper we examine the impact of international trade on the absolute and relative wages of educated and less-educated workers in Canada over 1993-96. We show that after correcting for the relative supply effect of educated to less educated workers the wage differential would have been on...

Consider a principal who appoints an agent. Let the agent potentially serve for a sufficiently long time that one principal is replaced by another over this period. Suppose also that the quality of the agent appointed increases with the effort the incumbent principal devotes to hiring. Then the...

We present an applied general equilibrium modelling approach to analyse employment and unemployment effects of labour tax cuts in an economy where wages are determined through firm-union bargaining at the sectoral level. In such a labour market regime, simulations for Germany show that labour...

With varying aptitudes in different occupations, individuals typically maximize income by specializing in one occupation which promises the highest income. Due to numerous labor market imperfections and uncertainties, the choice of best occupation is accomplished with only partial success. We...