The U.S. wage and earnings distributions display significantly higher levels of inequality today compared to the late 1960's. The aim of this paper is twofold. First, we want to assess to what extent the observed changes in inequality can be explained by a model that incorporates the...

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...

In a search-theoretic two region model, we analyse the impact of unskilled immigration and skill biased technological change on native wages and unemployment in local labour markets. We show that a specific combination of number and skills of immigrants generates a technology adoption of firms...

We find a significant export wage premium for higher-skilled workers and a significant export wage discount for lower-skilled workers, using a matched employer-employee data set for German manufacturing firms. Estimates suggest that up to one third of the overall skill premia is associated with...

Job polarisation and increasing wage inequality is observed in many rich countries, including Germany. Both phenomena are well-discussed in international literature, though a link can only be observed in the U.S. I assess the impact of job polarisation upon wage inequality in Germany by...

This paper provides evidence that labor reallocation from the manufacturing into the non-manufacturing sector causes an increase in sorting of high-skilled (low-skilled) workers into high-paying (low-paying) firms and thereby triggers a rise in wage inequality. I use data on 50% of all West...

This paper presents general results on the effect of endogenous technical change on relative wages in a simple general equilibrium model that covers several more elaborate models of technology choice. The results are based on a simple and intuitive notion of complementarity between technology...

With respect to the labor market participation of the elderly in welfare states, the economic literature focuses on the incentives to the worker in the light of generous early retirement opportunities. The sociological literature on the other hand addresses the problem of low productivity of...

This contribution is motivated by two stylized observations, the slowdown in growth, and a simultaneous income polarization in many advanced economies. While mainstream neoclassical and endogenous growth theory cannot sufficiently explain the nexus, we argue that the demand side plays a role. We...

Our very simple two agent New Keynesian model is highly stylised. It consists of an entrepreneur, who owns the economies' firms, consumes and saves, but does not work (or does not receive wage income), while the worker consumes and works, but cannot save. The allocation of the ability to save...