Risk, Occupational Choice, and Inequality
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Date
2007-09-10T11:14:31Z
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Abstract
This essay presents a new theory explaining increased wage inequality. A standard
endogenous growth model is augmented with occupational choice of highskill
workers. Depending on the occupational choice, high-skill workers earn either
a certain or uncertain income. Wage inequality, measured by the average wage of
high-skill workers divided by the average wage of low-skill workers, can increase
or decrease due to an increased supply of high-skill workers.
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Keywords
Distribution, Wages, Cooperatives, Technological Change, Economic Growth, JEL: D33, J31, J54, O32, O41