SKILL POLARIZATION IN LOCAL LABOR MARKETS UNDER SHARE-ALTERING TECHNICAL CHANGE

Antonio Accetturo, Alberto Dalmazzo and Guido de Blasio

Journal of Regional Science, 2014, vol. 54, issue 2, 249-272

Abstract: type="main">

This paper considers the “share-altering” technical change hypothesis in a spatial general equilibrium model where individuals have different levels of skills. Building on a simple Cobb-Douglas production function, our model shows that the implementation of skill-biased technologies requires a sufficient proportion of highly educated individuals. Moreover, when technical progress disproportionately replaces middle-skill jobs, the local distribution of skills will exhibit “fat-tails,” where the proportion of both highly skilled and low-skilled workers increases. These and several other predictions of the model are consistent with recent existing evidence, and avoid some major criticism against the “canonical” CES framework.

Date: 2014
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Related works:
Working Paper: Skill Polarization in Local Labour Markets under Share-Altering Technical Change (2012)
Working Paper: Skill Polarization in Local Labour Markets under Share-Altering Technical Change (2011)
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