Research Paper on:
Wage Inequality and Lester Thurow's Job Competition and Wage Competition Models

Unformatted Sample Text from the Research Paper:
re-allocate labour between industries, or between occupations - flexibility of wages (Monash College, nd). * Except in the case of monopsony, labour receives a wage which equates with its productivity  (Monash College, nd). * Supply and demand factors can determine both wage rates and employment levels for particular occupations in different industries and firms (Monash College, nd). * The  decision to "invest" in education and/or training, to raise productivity and earning potential, can be considered in the same light as any business investment decision (Monash College, nd). * Labour  is not homogeneous, but is distinguished by natural ability, education and training. These differences reflect in productivity and in relative wage rates (Monash College, nd). Thurows discussion of the  job competition model has been interpreted to make these conclusions: * Labour markets adjust to changes in supply and/or demand through the mechanism of wage adjustments (Monash College, nd). *  If demand for the product declined so would the derived demand for labour, then, the employer would offer lower wages and/or employees would be laid off (Monash College, nd). *  Workers respond to changes in wages by leaving low paid jobs and moving to high paid jobs (Monash College, nd). Thurow also proposed there was a labor market that was  over-educated and this was one of the problems with employment. Gray and Chapman conducted a study that focused on what they called the "conflicting signals arising from labor markets for  college-educated workers" (1999, p. 661). These investigators reported that there was conflicting evidence in the labor market, that the data regarding actual wages would suggest there was a shortage of  employees who were college-educated (Gray and Chapman, 1999). They based this supposition on data that suggested the incomes of college-educated employees increased significantly over the incomes of high school graduates