Arbeitspapier
Why Didn't the College Premium Rise Everywhere? Employment Protection and On-the-Job Investment in Skills
Why has the college wage premium risen rapidly in the United States since the 1980s, but not in European economies such as Germany? We argue that differences in employment protection can account for much of the gap. We develop a model in which firms and workers make relationship-specific investments in skill accumulation. The incentive to invest is stronger when employment protection creates an expectation of long-lasting matches. We argue that changes in the economic environment have reduced relationship-specific investment for less-educated workers in the United States, but not for better-protected workers in Germany.
- Language
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Englisch
- Bibliographic citation
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Series: IZA Discussion Papers ; No. 13325
- Classification
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Wirtschaft
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Human Capital; Skills; Occupational Choice; Labor Productivity
Wage Level and Structure; Wage Differentials
Economic Development: Human Resources; Human Development; Income Distribution; Migration
- Subject
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college wage premium
employment protection
job-specific skills
- Event
-
Geistige Schöpfung
- (who)
-
Doepke, Matthias
Gaetani, Ruben
- Event
-
Veröffentlichung
- (who)
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Institute of Labor Economics (IZA)
- (where)
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Bonn
- (when)
-
2020
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Doepke, Matthias
- Gaetani, Ruben
- Institute of Labor Economics (IZA)
Time of origin
- 2020
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