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Risk, Occupational Choice, and Inequality

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  • Sandén, Klas

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

Abstract

This essay presents a new theory explaining increased wage inequality. A standard endogenous growth model is augmented with occupational choice of highskill workers. Depending on the occupational choice, high-skill workers earn either a certain or uncertain income. Wage inequality, measured by the average wage of high-skill workers divided by the average wage of low-skill workers, can increase or decrease due to an increased supply of high-skill workers.

Suggested Citation

  • Sandén, Klas, 2007. "Risk, Occupational Choice, and Inequality," Working Papers in Economics 263, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0263
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    File URL: http://hdl.handle.net/2077/4754
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    References listed on IDEAS

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    More about this item

    Keywords

    Distribution; Wages; Cooperatives; Technological Change; Economic Growth;
    All these keywords.

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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