July 16, 2003

Rising skill premia; you ain't seen nothing yet?

Inkomensongelijkheid neemt toe door stijgende vraag naar hoogopgeleiden

Press release
De inkomensverschillen tussen hooggeschoolden en laaggeschoolden zijn de afgelopen vijfentwintig jaar fors toegenomen, ondanks de sterke stijging van het aandeel hoogopgeleiden in de beroepsbevolking.

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Dick Morks

Increases in inequality between low and high-skilled workers are likely to affect welfare state policies in upcoming decades. Demand for redistribution puts pressure on marginal income-tax rates and other social security measures.

We come to this conclusion by confronting expected supply and demand for skill. If demand for skill continues to increase at the pace of the last decades, supply has to keep up its high rate of growth of the last decades too. A priori, the former is plausible, the latter is not. This paper makes this point and sketches the major uncertainties surrounding the underlying trends.


Richard Nahuis
Henri de Groot