Supply and demand, allocation and wage inequality: An international comparison

A. Dupuy*, L. Borghans

*Corresponding author for this work

Research output: Contribution to journalComment/Letter to the editorAcademicpeer-review

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An allocation model of workers differentiated by their field of study is developed to test whether international differences in the wage structure can be explained by differences in labour demand and supply in each country. The model explicitly takes into account the effects of supply and demand shifts on the allocation structure to disentangle country specific differences in the recruitment for one occupation from real supply–demand effects. Empirical results based on data for nine countries show that cross-country differences in wage inequality explain at least two–third of the differences in labour demand and supply.
Original languageEnglish
Pages (from-to)1073-1088
Number of pages16
JournalApplied Economics
Issue number9
Publication statusPublished - 1 Jan 2005

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