- Authors
- Michael Knoblach TU Dresden
- title
- Skill-Biased Technological Change, Endogenous Labor Supply, and the Skill Premium
- Please use the following URL when quoting:
- https://nbn-resolving.org/urn:nbn:de:bsz:14-qucosa2-344199
- Series
- CEPIE Working Paper
- multivolume_volume0
- 03/19
- publication_date
- 2019
- issn
- 2510-1196
- Abstract (EN)
- The evolution of the U.S. skill premium over the past century has been characterized by a U-shaped pattern. The previous literature has attributed this observation mainly to the existence of exogenous, unexpected technological shocks or changes in institutional factors. In contrast, this paper demonstrates that a U-shaped evolution of the skill premium can also be obtained using a simple two-sector growth model that comprises both variants of skill-biased technological change (SBTC): technological change (TC) that is favorable to high-skilled labor and capital-skill complementarity (CSC). Within this framework, we derive the conditions necessary to achieve a non-monotonic evolution of relative wages and analyze the dynamics of such a case. We show that in the short run for various parameter constellations an educational, a relative substitutability, and a factor intensity effect can induce a decrease in the skill premium despite moderate growth in the relative productivity of high-skilled labor. In the long run, as the difference in labor productivity increases, the skill premium also rises. To underpin our theoretical results, we conduct a comprehensive simulation study.
- Keywords (EN)
- Skill-Augmenting Technological Change, Capital-Skill Complementarity, Skill Premium, Neoclassical Growth Model
- Classification (DDC)
- 330
- Classification (RVK)
- QC 000
- university_publisher
- Technische Universität Dresden, Dresden
- version
- Entwurf
- URN Qucosa
- urn:nbn:de:bsz:14-qucosa2-344199
- Qucosa date of publication
- 08.07.2019
- Document type
- research_paper
- Document language
- English
- licence