The Low-Skill, Bad-Job Trap

22 Pages Posted: 15 Feb 2006

See all articles by Dennis J. Snower

Dennis J. Snower

University of Kiel - Institute for World Economics (IfW); Institute for the Study of Labor (IZA); Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: July 1994

Abstract

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.

JEL Classification: D21, D62, D82, D83, E24, J22, J23, J31, J63

Suggested Citation

Snower, Dennis J., The Low-Skill, Bad-Job Trap (July 1994). IMF Working Paper No. 94/83. Available at SSRN: https://ssrn.com/abstract=883810

Dennis J. Snower (Contact Author)

University of Kiel - Institute for World Economics (IfW) ( email )

Duesternbrooker Weg 120
D-24118 Kiel
Germany
+49+431-8814-235 (Phone)

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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