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Title:Skill Upgrading and Rigid Relative Wages: The Case of Danish Manufacturing PDF Logo
Authors:Sørensen, Anders
Skaksen, Jan Rose
Issue Date:2003
Series/Report no.:IZA Discussion paper series 664
Abstract:Relative wages have been remarkably rigid for the last two decades in Danish manufacturing despite large shifts in relative employment from unskilled labor towards skilled and educated labor. Assuming capital-skill complementarity and fixed relative wages as a consequence of labor market institutions, we argue that skill upgrading is more pronounced during downturns than upturns. This prediction is supported by a high positive and significant correlation between changes in relative employment of skilled labor and changes in the unemployment rate. Furthermore, we show that international outsourcing has played an important role in explaining the shift in relative labor demand.
Subjects:rigid relative wages
skill upgrading
business cycle
outsourcing
skill biased technological changes
JEL:O39
F02
E32
J51
J31
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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