Structural change and the skill premium in a global economy

Yang Xu

Journal of Economic Dynamics and Control, 2022, vol. 138, issue C

Abstract: We develop a multi-country general equilibrium model with structural change to investigate the factors affecting the global changes in the skill premium between 1997 and 2007. Trade and technological change increase the skill premium by inducing reallocations to skill-intensive sectors. We apply our three-sector framework to 37 countries, and the model accounts completely for countries’ trade, sales, consumption, and skill premium in terms of different types of fundamental shocks. Technological changes, both skill biased and Hicks neutral, account for most of the increases in the skill premium. The effects of Hicks-neutral total factor productivity growth act through structural change.

Keywords: Trade; Technological change; Structural change; Skill premium (search for similar items in EconPapers)
JEL-codes: F16 F62 F63 O14 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:138:y:2022:i:c:s0165188922000690

DOI: 10.1016/j.jedc.2022.104364

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