Elasticity of Substitution and Disaggregation of Labor by Skill Level: Empirical Measurement Using a Global Database

Gouranga Das

Applied Econometrics and International Development, 2003, vol. 3, issue 1

Abstract: The 45 region ´ 50 commodity ´ 5 primary factor version of the Global Trade Analysis Project's [GTAP] database provides us with the splits of total labor payments into skilled and unskilled labor-presupposing substitution possibilities between them. Given the skilled labor payment shares of the GTAP database, we offer an ex post rationalization within a production-theoretic framework. This relies on inter-regional covariation in the GTAP shares and in measures of educational attainment. Adoption of a suitable nesting of skilled-unskilled labor in GTAP's production function enables us to derive a 'reasonable' value for the (implicit) substitution elasticity between skilled-unskilled labors.

JEL-codes: J24 J31 O15 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (4)

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