Employment inequality: Why do the low-skilled work less now?

A-Tier
Journal: Journal of Monetary Economics
Year: 2021
Volume: 118
Issue: C
Pages: 161-177

Score contribution per author:

4.022 = (α=2.01 / 1 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Low-skilled prime-age men are less likely to be employed than high-skilled prime-age men, and the differential has increased since the 1970s. I build a search model encompassing three explanations: (1) automation and trade reduced the demand for low-skilled workers; (2) health, welfare, and recreational gaming/computer technology reduced the supply of low-skilled workers; and (3) factors affecting job search, such as online job boards, reduced frictions for high-skilled workers. I find a shift in demand away from low-skilled workers was the leading cause, a shift in supply had little effect, and search frictions actually reduced employment inequality.

Technical Details

RePEc Handle
repec:eee:moneco:v:118:y:2021:i:c:p:161-177
Journal Field
Macro
Author Count
1
Added to Database
2026-01-29