Can Labour Supply Explain the Rise in Unemployment and Inter-Group Wage Inequality in the OECD?
1997 (English)Report (Other academic)
This paper investigates the consequences of labour supply change in the OECD countries in the last decades. It is argued that changes in supply cannot be thought as homogenous: these changes involve more young and more adult female workers, that are complement with skilled men and substitute with low-wage groups (young, unskilled). Logically, these labour supply trends since the 50's increased competition between women, the young workers and the low skilled workers in some segments of the labour force. An empirical strategy to test these hypothesis is undertaken. Disaggregation by gender is necessary. Endogeneity of participation levels with respect to unemployment is treated in two ways, by instrumental variables estimations, and with vectorial autoregression techniques. Casual relations between participation and unemployment cannot be rejected. The estimated elasticity implies that the observed changes in labour supply account for a significant part of the increase in unemployment.
Place, publisher, year, edition, pages
Stockholm: IIES , 1997. , 38 p.
Seminar Paper / Institute for International Economic Studies, Stockholm University, ISSN 0347-8769 ; 629
IdentifiersURN: urn:nbn:se:su:diva-41982OAI: oai:DiVA.org:su-41982DiVA: diva2:343340