Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/17945 
Year of Publication: 
2007
Series/Report no.: 
Economics Discussion Papers No. 2007-22
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
Abstract: 
The expansion of higher education in theWestern countries has been accompanied by a marked widening of wage differentials and increasing overqualification. While the increase in wage differentials has been attributed to skill-biased technological change that made advanced skills scarce, this explanation does not fit well with the observed increase in overqualification which suggests that advanced skills are in excess supply. By ?Reder-competition? I refer to the simultaneous adjustment of wage offers and hiring standards in response to changing labor market condition. I present a simple model of Reder competition that reproduces the simultaneous increase in wage differentials and overqualification in response to an increase in education.
Subjects: 
Hiring standards
employment criteria
selection wages
efficiency wages
mobility
skillbiased technical change
overeducation
wage dispersion
JEL: 
D43
J63
J31
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Working Paper

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