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The lost race between schooling and technology

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  • Bas Jacobs

Abstract

We study the evolution of wage inequality between skilled and unskilled workers in the Netherlands for the years 1969-2020. Our analysis is based on estimates of the production structure in the Netherlands, projections of the relative supply of skilled workers, and projections regarding shifts in relative demand for skilled workers. We study the evolution of wage inequality between skilled and unskilled workers in the Netherlands for the years 1969-2020. Our analysis is based on estimates of the production structure in the Netherlands, projections of the relative supply of skilled workers, and projections regarding shifts in relative demand for skilled workers. Wage inequality will increase under plausible assumptions because relative demand for skilled workers will increase more rapidly than the relative supply of skilled workers. We study the potential of education subsidies to higher education in order to stimulate the supply of skilled workers thereby off-setting the projected increase in wage inequality. Our findings suggest that education subsidies are not very effective in combating increases in wage inequality.

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  • Bas Jacobs, 2003. "The lost race between schooling and technology," CPB Discussion Paper 25, CPB Netherlands Bureau for Economic Policy Analysis.
    • Handle: RePEc:cpb:discus:25
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    Cited by:

    1. Nelson B. Villoria, 2009. "China and the Manufacturing Terms-of-Trade of African Exporters," Journal of African Economies, Centre for the Study of African Economies, vol. 18(5), pages 781-823, November.
    2. Moreno ROMA & Paul HIEBERT, 2010. "Relative House Price Dynamics Across Euro Area and US Cities: Convergence or Divergence?," EcoMod2010 259600143, EcoMod.
    3. Dirk Schindler & Benjamin Weigert, 2008. "Educational and Wage Risk: Social Insurance vs. Quality of Education," CESifo Working Paper Series 2513, CESifo.
    4. Richard Nahuis & Henri de Groot, 2003. "Rising skill premia; you ain't seen nothing yet?," CPB Discussion Paper 20, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Rossana Patron & Marcel Vaillant, 2012. "Can Education Policy Address The Wage Gap? A Note On Public Skill Formation In Developing Countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 24(3), pages 369-378, April.
    6. Rebecca Galloway & James Jozefowicz, 2008. "The Effects of Immigration on Regional Unemployment Rates in The Netherlands," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 14(3), pages 291-302, August.
    7. Schindler, Dirk, 2008. "Human Capital, Multiple Income Risk and Social Insurance," Discussion Papers 2008/18, Norwegian School of Economics, Department of Business and Management Science.
    8. Kim Heide & Dennis Fredriksen & Erling Holmøy & Ingeborg Foldøy Solli, 2006. "The Declining Skill-premium in Norway: How Skill-Biased Technical Change is Compatible with a Declining Wage Premium," EcoMod2006 272100038, EcoMod.
    9. repec:use:tkiwps:022 is not listed on IDEAS
    10. George Gelauff & Arjan Lejour, 2006. "Five Lisbon highlights; the economic impact of reaching these targets," CPB Document 104.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    11. Eva Gutiérrez-i-Puigarnau & Ismir Mulalic & Jos N. van Ommeren, 2016. "Do rich households live farther away from their workplaces?," Journal of Economic Geography, Oxford University Press, vol. 16(1), pages 177-201.
    12. repec:kap:iaecre:v:14:y:2008:i:3:p:291-302 is not listed on IDEAS
    13. Dirk Schindler & Benjamin Weigert, 2008. "Insuring Educational Risk: Opportunities versus Income," CESifo Working Paper Series 2348, CESifo.
    14. Joëlle Noailly & Daniël Waagmeester & Bas Jacobs & Marieke Rensman & Dinand Webbink, 2005. "Scarcity of science and engineering students in the Netherlands," CPB Document 92, CPB Netherlands Bureau for Economic Policy Analysis.
    15. Jan Kakes & Jasper de Winter, 2008. "Preferences for redistribution in the Netherlands," DNB Working Papers 179, Netherlands Central Bank, Research Department.
    16. Joëlle Noailly & Daniël Waagmeester & Bas Jacobs & Marieke Rensman & Dinand Webbink, 2005. "Scarcity of science and engineering students in the Netherlands," CPB Document 92.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    17. A. Dupuy, 2007. "Will the skill-premium in the Netherlands rise in the next decades?," Applied Economics, Taylor & Francis Journals, vol. 39(21), pages 2723-2731.
    18. Gelauff, George & Lejour, Arjan, 2006. "The new Lisbon Strategy: An estiamtion of the impact of reaching 5 Lisbon targets," MPRA Paper 16168, University Library of Munich, Germany.
    19. Bas Jacobs, 2005. "Simulating the Lisbon skills targets in WorldScan," CPB Memorandum 135, CPB Netherlands Bureau for Economic Policy Analysis.
    20. Dupuy, A., 2003. "Will the source of demand shifts please stand up? Steady demand or Acceleration," ROA Research Memorandum 4E, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    21. Jacqmin, Julien, 2014. "The Emergence of For-Profit Higher Education Institutions," MPRA Paper 59299, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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