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Skill Bias And Employment Frictions In The U.S. Labor Market 1970-1990

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  • Xavier Cuadras-Morató
  • Xavier Mateos-Planas

Abstract

This article studies simultaneous changes in four labor market variables: the unemployment rates for college and high-school graduates, the education wage premium, and the level of college participation. It develops an equilibrium search and matching model of the labor market where education is endogenously determined. Then the model is used to investigate quantitatively whether the change in the above labor market variables from 1970 to 1990 in the United States can be traced to changes in the environment. A skill-biased change in technology together with an increase in employment frictions can explain much of the observed variation in these variables. Copyright 2006 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

Suggested Citation

  • Xavier Cuadras-Morató & Xavier Mateos-Planas, 2006. "Skill Bias And Employment Frictions In The U.S. Labor Market 1970-1990 ," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(1), pages 129-160, February.
    • Handle: RePEc:ier:iecrev:v:47:y:2006:i:1:p:129-160
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    Cited by:

    1. Cuadras-Morató Xavier & Mateos-Planas Xavier, 2013. "Overeducation and skill-biased technical change," The B.E. Journal of Macroeconomics, De Gruyter, vol. 13(1), pages 105-122, September.
    2. Anurag Banerjee & Parantap Basu & Elisa Keller, 2023. "Cross‐country disparities in skill premium and skill acquisition," Economic Inquiry, Western Economic Association International, vol. 61(1), pages 179-198, January.
    3. Obiols-Homs, F. & Sánchez-Marcos, V., 2018. "Education outcomes and the labor market," Labour Economics, Elsevier, vol. 54(C), pages 14-28.
    4. Xavier Cuadras Morató & Xavier Mateos-Planas, 2006. "Wage Inequality and Unemployment with Overeducation," Working Papers 249, Barcelona School of Economics.
    5. Francesc Obiols-Homs & Virginia Sánchez-Marcos, 2015. "Education, Occupation-Mismatch and Unemployment," Working Papers 807, Barcelona School of Economics.
    6. Mateos-Planas, Xavier & Cuandras-Morato, Xavier, 2009. "Wage inequality and unemployment with overeducation," Discussion Paper Series In Economics And Econometrics 911, Economics Division, School of Social Sciences, University of Southampton.

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