The consensus in the literature investigating the causes of increased wage inequality in developed nations since 1980 is that skill-biased technical change is responsible for the widening of the wage distribution. A shortcoming in this literature is that technical change is commonly determined residually; that is, those changes in relative wages unexplained by other factors are attributed to ch...

This article develops a model in which quit rates, and thus the income distribution, depend on employee perceptions of the accuracy of employer assessments of individual productivity because these latter assessments affect wages. When employees believe that these assessments are accurate, income inequality tends to be high. The model can account for the negative correlation across some countrie...

Using data drawn from the Canadian, Mexican, and U.S. censuses, we find a numerically comparable and statistically significant inverse relation between immigrant-induced shifts in labor supply and wages in each of the three countries: A 10% labor supply shift is associated with a 3%-4% oppositesigned change in wages. Despite the similarity in the wage response, the impact of migration on the wa...

This paper explains the narrowing of gender gaps in wages and market hours in recent decades by the growth of the service economy. We propose a model with three sectors: goods, services and home production. Women have a comparative advantage in the production of services in the market and at home. The growth of the services sector, in turn driven by structural transformation and marketization o...

The second and third generation of immigrants have been the centre of a lively debate about the economic integration of immigrants into their host societies, but there is little empirical evidence on the German case. In this study I comprehensively portray the labour market outcomes of second generation immigrants in Germany. Special attention is attributed to observable heterogeneity in terms ...

We construct an endogenous growth model of directed technical change with automation (the introduction of machines which replace low-skill labor and complement high-skill labor) and horizontal innovation (the introduction of new products, which increases demand for both types of labor). For general processes of technical change, we demonstrate that although low-skill wages can drop during perio...

Abstract In a model with endogenous female labour supply and wages, we show that liquidity constraints prevent households from buying child care generate an inefficiency amplify gender gaps in the market. We evaluate relative merits of paid maternity leave, subsidies, government loans mitigating promoting equality. While extension duration leave has ambiguous effects, subsidies form vouchers re...

I study the long-run effects of credit market disruptions on real firm outcomes and how these depend nominal wage rigidity at level. Exploiting variation in firms' refinancing needs during global financial crisis, trace out investment growth trajectories response to a supply shock. Financially shocked firms exhibit temporary gap for two years, resulting persistent accumulated six years after cr...

Small firms are often seen to be the engines of growth. There are two main sources of empirical evidence that are adduced to support this conclusion. The first is that job creation has been coming mainly from small firms. The second is that the share of employment accounted for by small firms has increased in the past two decades. Both of these sources rely on a simple metric--employment. This ...

Demand for less-skilled workers plummeted in developed countries in the 1980s. In open economies, pervasive skill-biased technological change (SBTC) can explain this decline. SBTC tends to increase the domestic supply of unskillintensive goods by releasing less-skilled labor. The more countries experiencing a SBTC, the greater its potential to decrease the relative wages of less-skilled labor b...