Globalization, technical change and the skill premium: magnification effects from human-capital investments

Jürgen Meckl and Benjamin Weigert ()

Journal of International Trade & Economic Development, 2003, vol. 12, issue 4, pages 319-336

Abstract: This paper shows that endogenous adjustments in the composition of labour supplies magnify the effects of changes in commodity prices on the measured skill premium under quite plausible conditions. These composition effects arise from decisions of individuals with heterogeneous inherent abilities about acquiring human capital. They reinforce the well-known Stolper-Samuelson effect on the measured skill premium in countries with a sufficiently high relative supply of skilled labour, but compensate them otherwise. As a result, the model can account for the observation of a worldwide increase in the skill premium during the last two decades.

Keywords: Wage Inequality; Globalization; Technical Change (search for similar items in EconPapers)
Date: 2003
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Working Paper: Globalization, Technical Change, and the Skill Premium: Magnification Effects from Human-Capital Investments (2032)
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