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Title: Employment Inequality: Why do the Low-Skilled Work Less Now?

Citation Type: Miscellaneous

Publication Year: 2018

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

Url: http://econweb.ucsd.edu/~ewolcott/pdfs/Employment_Inequality.pdf

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Authors: Wolcott, Erin L

Publisher: Middlebury College

Data Collections: IPUMS CPS

Topics: Labor Force and Occupational Structure

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