The US labour market is characterized by a high skill wage mark-up and low unemployment, while the German labour market … has a low skill wage mark-up and a high, mainly unskilled unemployment rate. This paper adds an innovative labour supply … mark-up stronger than in Germany in the wake of skill-biased technological change. The reason is that the unskilled …

The US labour market is characterized by a high skill wage mark-up and low unemployment, while the German labour market … has a low skill wage mark-up and a high, mainly unskilled unemployment rate. This paper adds an innovative labour supply … mark-up stronger than in Germany in the wake of skill-biased technological change. The reason is that the unskilled …

This paper has developed a three-sector general equilibrium framework that explains unemployment of both skilled and … unskilled labour. Unemployment of unskilled labour is of the Harris-Todaro (1970) type while unemployment of skilled labour is …-unskilled wage inequality and the extent of unemployment of both types of labour crucially hinge on the properties implied by the …