Citation

Discussion Paper Details

Please find the details for DP14846 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Why Didn't the College Premium Rise Everywhere? Employment Protection and On-the-Job Investment in Skills

Author(s): Matthias Doepke and Ruben Gaetani

Publication Date: June 2020

Keyword(s): college wage premium, employment protection and Job-Specific Skills

Programme Area(s): Labour Economics and Macroeconomics and Growth

Abstract: 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.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=14846

Bibliographic Reference

Doepke, M and Gaetani, R. 2020. 'Why Didn't the College Premium Rise Everywhere? Employment Protection and On-the-Job Investment in Skills'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=14846