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Title:Wage Dispersion, Over-Qualification, and Reder Competition PDF Logo
Authors:Schlicht, Ekkehart
Issue Date:2007
Citation:[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [Volume:] 1 [Issue:] 2007-13 (Version 2) [Pages:] 1-22 [URL:]
Abstract:The expansion of higher education in the Western countries has been accompanied by a marked widening of wage differentials and increasing over-qualification. 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 over-qualification 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 conditions. I present a simple model of Reder competition that depicts wages as driven by labor heterogeneity, rather than scarcity. The mechanism may give rise to a simultaneous increase in wage differentials and over-qualification.
Subjects:Hiring standards
employment criteria
selection wages
efficiency wages
skillbiased technological change
heterogeneity-biased technological change
wage dispersion
Reder competition
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Document Type:Article
Appears in Collections:Economics: The Open-Access, Open-Assessment E-Journal - Journal Articles

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