Unemployment, wage rigidity, and the returns to education

Gilles Saint-Paul

doi:10.1016/0014-2921(94)90089-2

Unemployment, wage rigidity, and the returns to education

Gilles Saint-Paul

Economics

Research output: Contribution to journal › Article › peer-review

Abstract

If real wage formation is rigid then an increase in the proportion of skilled workers in the economy may increase the relative unemployment rate of the unskilled, thus rendering them 'obsolete' or 'unemployable'. This in turn may generate increasing returns to education and multiple equilibria. A human intensive equilibrium may coexist with a physical capital intensive equilibrium. The ranking of equilibria with respect to welfare and unemployment is a priori ambiguous.

Original language	English (US)
Pages (from-to)	535-543
Number of pages	9
Journal	European Economic Review
Volume	38
Issue number	3-4
DOIs	https://doi.org/10.1016/0014-2921(94)90089-2
State	Published - Apr 1994

Keywords

Human capital
Unemployment
Wage formation

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/0014-2921(94)90089-2

Cite this

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AB - If real wage formation is rigid then an increase in the proportion of skilled workers in the economy may increase the relative unemployment rate of the unskilled, thus rendering them 'obsolete' or 'unemployable'. This in turn may generate increasing returns to education and multiple equilibria. A human intensive equilibrium may coexist with a physical capital intensive equilibrium. The ranking of equilibria with respect to welfare and unemployment is a priori ambiguous.

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Unemployment, wage rigidity, and the returns to education

Abstract

Keywords

ASJC Scopus subject areas

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