Discussion Paper

No. 2007-22 | July 03, 2007
Wage Dispersion and Overqualification as Entailed by Reder Competition

Abstract

 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

D43 J31 J63

Cite As

Ekkehart Schlicht (2007). Wage Dispersion and Overqualification as Entailed by Reder Competition. Economics Discussion Papers, No 2007-22, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2007-22

Assessment



Comments and Questions


Anonymous - Referee Report
August 13, 2007 - 09:23

see attached file


Ekkehart Schlicht - Reply
August 14, 2007 - 10:55

Reply to Referee Report of August 13


Anonymous - Referee Report
September 05, 2007 - 11:43

see attached file


Ekkehart Schlicht - Reply to Referee Report of September 5
September 05, 2007 - 15:12

Anonymous - Associate Editor Report
September 07, 2007 - 13:23

see attached file


Anonymous - Resubmission
October 29, 2007 - 17:07

Revised version - Covering letter explaining changes


Anonymous - Resubmission
October 29, 2007 - 17:08

Revised version


Anonymous - Resubmission
October 29, 2007 - 17:09

Calculations for appendix of revised version