Labor Substitutability among Schooling Groups

Mark Bils, Baris Kaymak and Kai-Jie Wu

American Economic Journal: Macroeconomics, 2024, vol. 16, issue 4, 1-34

Abstract: Given worldwide trends in education, wage premium for schooling, and real GDP, we derive a lower bound for the long-run elasticity of labor substitution across schooling groups of around 4, which is far higher than values commonly used in the literature. We exploit our bound to reexamine the importance of human capital in cross-country income differences, including the roles of school quality versus the skill bias of technology in the greater efficiency gains from schooling in richer countries.

JEL-codes: E23 E24 I26 J24 J31 O15 (search for similar items in EconPapers)
Date: 2024
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Working Paper: Labor Substitutability among Schooling Groups (2022)
Working Paper: Labor Substitutability among Schooling Groups (2022)
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DOI: 10.1257/mac.20220288

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