The expansion of higher education in the Western countries has been accompanied by a marked widening of wage differentials and increasing overqualification. 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 overqualification 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 condition. I present a simple model of Reder competition that reproduces the simultaneous increase in wage differentials and overqualification in response to an increase in education.

JEL Classification

Comments and Questions

Anonymous - Referee Report

August 13, 2007 - 09:23

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Ekkehart Schlicht - Reply

August 14, 2007 - 10:55

Reply to Referee Report of August 13

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Anonymous - Referee Report

September 05, 2007 - 11:43

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Ekkehart Schlicht - Reply to Referee Report of September 5

September 05, 2007 - 15:12

See below

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Anonymous - Associate Editor Report

September 07, 2007 - 13:23

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Anonymous - Resubmission

October 29, 2007 - 17:07

Revised version - Covering letter explaining changes

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Anonymous - Resubmission

October 29, 2007 - 17:08

Revised version

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Anonymous - Resubmission

October 29, 2007 - 17:09

Calculations for appendix of revised version

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