The Low-Skill, Bad-Job Trap

July 1, 1994

Preview Citation

Format: Chicago

Alun H. Thomas The Low-Skill, Bad-Job Trap, (USA: International Monetary Fund, 1994) accessed September 20, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The paper explains how a country can fall into a “low-skill, bad-job trap,” in which workers acquire insufficient training and firms provide insufficient skilled vacancies. In particular, the paper argues that in countries where a large proportion of the workforce is unskilled, firms have little incentive to provide good jobs (requiring high skills and providing high wages), and if few good jobs are available, workers have little incentive to acquire skills. In this context, the paper examines the need and effectiveness of training policy, and provides a possible explanation for why western countries have responded so differently to the broad-based shift in labor demand from unskilled to skilled labor.

Subject: Education, Labor, Labor demand, Labor supply, Skilled labor, Wages

Keywords: Central and Eastern Europe, Earnings differential, Europe, Job vacancy, Labor demand, Labor supply, Market failure, Skilled labor, Training function, Training supply externality, Vacancy decision, Vacancy supply externality, Wage-employment experience, Wages, WP

Publication Details

Pages:

22
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1994/083
Stock No:

WPIEA0831994
ISBN:

9781451954524
ISSN:

1018-5941

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