Implicit Contracts and the Cyclicality of the Skill-Premium

Arbeitspapier

To examine the cyclical behavior of the skill-premium, this paper introduces implicit labor contracts in a DSGE model where production is characterized by capital-skill complementarity and the utilization of capital is endogenous. It is shown that this model can reproduce the observed cyclical patterns of wages and the skill-premium. The feature of capital-skill complementarity coupled with variable capital utilization rates does not come at odds with the acyclical behavior of the skill-premium. The paper argues that the skill-complementarity of capital is not a quantitatively signiÖcant factor at high frequencies. The key aspects are the contracts and the capital utilization margin.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Cardiff Economics Working Papers ; No. E2007/19

Classification and Topics

• Classification: Wirtschaft ; General Aggregative Models: Neoclassical ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Business Fluctuations; Cycles
• Subject: Implicit Contracts ; Wages ; Skill-Premium ; Business Cycles ; CapitalSkill Complementarity ; Lohndifferenzierung ; Qualifikation ; Konjunktur ; Allgemeines Gleichgewicht ; Lohntheorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Pourpourides, Panayiotis M.
• Event: Veröffentlichung
• (who): Cardiff University, Cardiff Business School
• (where): Cardiff
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/83931
• Last update: 10.03.2025, 11:41 AM CET