Empirical studies find that the age-variance profile of wages is U-shaped. The objective of this paper is to explore the driving forces of the U-shape in a model with search frictions. I introduce endogenous search effort and a fixed retirement age into Cahuc, Postel-Vinay, and Robin s (2006)...

We implement a laboratory experiment in which a principal has to decide on monitoring intensity and pay to investigate whether they are complements or substitutes. Wage level, monitoring intensity, and consequently the desired enforceable effort level are jointly determined by the maximization...

The US and many European countries are witnessing substantial changes in the wage structure (Autor et al. 2006; Dustmann et al., 2009). Previous research has focused on changing returns to education and experience (Katz and Murphy, 1992), changes in the workforce composition (Lemieux, 2006), or the...

In this paper we study the relationship between intersectoral wage inequality and economic growth. In the empirical part of the paper, we find a negative correlation of relative wages in the financial sector with respect to manufacturing sector with subsequent economic growth in case of the U.S....

This paper investigates the effect of the size of the local labour market on skill mismatch. Using survey data for Germany, we find that male workers in large cities are both less likely to be overqualified for their job and to work in a different field than the one they are trained for....

While the growing supply of university skills is known to have agglomerated towards the large centers in Finland, there is no research knowledge available on the development of regional demands. This paper attempts to fill this gap by analyzing regional variation in the private-sector return to...

Stylized facts show that migrants more often face overqualified employment than natives. As shown by previous research, one third of the employed foreign born with tertiary education in the EU-15 are overqualified, with levels reaching up to 57.6%, compared to 20.9% among natives. Among the...

Income levels are higher in cities. The evidence for the income gap between urban and rural areas is overwhelming, but the agglomeration effect is hard to identify. Recent advances make use of individual level data to separate out sorting and instrumentation to handle the endogeneity of...

We employ the German social security register data to analyze the development of wage inequality among foreigners in Germany. The data show a sharp increase of wage inequality which exceeds the size observed for natives. The decomposition methods proposed by DiNardo et al. (1996) are employed to...

This paper examines the impact of parental investments on various skills during childhood using the Mannheim Study of Children at Risk (MARS). Our work offers three important innovations. First, we use reliable measures of the child's cognitive, mental and emotional skills as well as accurate...