Have the Relative Employment Prospects for the Low-Skilled Deteriorated After All?
Has the relative unemployment propensity for the low-skilled increased during the 1990’s? We address this question empirically, based on two notions of ‘low skills’; i) low education, and ii) low ability, conditioned on education and work experience. Ability is identified by previous earnings. Evaluated by the education-based measure, we find that unemployment propensity has not developed unfavourably for the low-skilled. Evaluated by the ability-based measure, it has. We uncover a steady deterio-ration of employment prospects for persons with low ability relative to others with similar formal qualifications. The adverse employment effects of being low-skilled are stronger the higher is formal education.
Røed, Knut and Nordberg, Morten
Skill-biased technical change, relative unemployment rates