Explaining international differences in wage inequality: Skills matter
Stijn Broecke, Glenda Quintini, Marieke Vandeweyer, OECD, France
Economics of Education Review Volume 60, Number 1, ISSN 0272-7757 Publisher: Elsevier Ltd
Several studies employing decomposition methods have argued that skills only play a minor role in explaining cross-country differences in wage inequality. In this paper, we build upon the work of Leuven, Oosterbeek and van Ophem (2004) and extend the decomposition analysis to take account of the relative demand for, and supply of, skills. Doing this confirms that skills do matter and are likely to be at least as important as labour market institutions in explaining international differences in wage inequality.
Broecke, S., Quintini, G. & Vandeweyer, M. (2017). Explaining international differences in wage inequality: Skills matter. Economics of Education Review, 60(1), 112-124. Elsevier Ltd.