This paper develops a dynamic general equilibrium model to highlight the role of human capital accumulation of agents differentiated by skill type in the joint determination of social mobility and the skill premium. We first show that our model captures the empirical co-movement of the skill...

We estimate the effects of unobserved skills on labor market outcomes by investigating a change in the distribution of unobserved skills. Among people with the same levels of observed skills such as education and work experience, there are still disparities in labor market outcomes. since...

This paper estimates the causal effect of the wage on the recruitment rate at the establishment level. During the 1990s, the wage setting for certified teachers in Norway was completely centralized, with a wage premium of about 10 percent at schools with severe recruitment problems in the past...

This paper addresses outsourcing in the two-type optimal income tax model. If the government is able to control outsourcing via a direct tax instrument, outsourcing will not affect the marginal income tax structure. In the absence of a direct tax instrument, and under the plausible assumption...

We analyze a general search model with on-the-job search and sorting of heterogeneous workers into heterogeneous jobs. This model yields a simple relationship between (i) the unemployment rate, (ii) the value of non-market time, and (iii) the max-mean wage differential. The latter measure of...