Unskilled Workers In The Labour Market

Labour market has been a source of debate from the time of classical economists to the new institutional economists. In the labour market the question that arises of skill are whether there is an incentive for the capitalists as well as the labour class to develop their skillswhich in turn can lead to rise in productivity. The question arises that are the capitalists more concerned about raising the productivity or profits, and also to see whether increasing productivity is the only way in which profits of capitalists can be raised.
“Skills refer to human capacities obtained by individual workers or to the specific demands that individual jobs require. Although it is difficult to define skill in a way that captures all its dimensions but studies

The difficult part here is to define skilled and unskilled workers asthese definitions differ from author to author and within course of time different studies have used different definitions in context of skill premium. A few studies categorized blue collar workers as unskilled and white collar workers as skilled (Goos, 2013). Some studies defined production workers as unskilled and non-production workers as skilled (Milner 2005). There is a wide literature available on definition of skilled and unskilled labour but fornow we would have to stick to educational qualification as proxy of skills. Now in case of narrowing definition of skill to education there are more distinctions among authors who take secondary education attained workers as skilled and others as unskilled (Roy, 2008) and whotake graduates as skilled and others as unskilled (Azam (2008) and Asuyama (2005)). The most appropriate division may be that labours who are graduate treating them as skilled, labourers who have attained secondary education as medium (semi) skilled and others as unskilled. This may have its own set of advantages and disadvantages but those can be looked at the methodological and analysis section of the

In the context of developing countries this is even truer since we find around large number of people working in different occupations with great proficiency but might not have any formal training or education. And hence it cannot be captured in the narrow concept of ‘skilled workers’ included in terms of educational attainments.However it is quite difficult to get data that appropriately captures all the dimensions of skill. Skills refer to human capacities obtained by individual workers or to the specific demands that individual jobs require and similarly Skill premium can be defined as relative wage of skilled workers to unskilled. Rising returns to skill has been acknowledged across the board as an outcome of increased demand for skilled labor and demand and Supply dynamics of skilled labor which has been shown to be the main cause of changes in the skill