Skill-Biased Structural Change

Francisco J Buera, Joseph Kaboski, Richard Rogerson and Juan I Vizcaino

The Review of Economic Studies, 2022, vol. 89, issue 2, 592-625

Abstract: Using a broad panel of advanced economies, we document that increases in GDP per capita are associated with a systematic shift in the composition of value added to sectors that are intensive in high-skill labour, a process we label as skill-biased structural change. It follows that further development in these economies leads to an increase in the relative demand for skilled labour. We develop a quantitative two-sector model of this process as a laboratory to assess the sources of the rise of the skill premium in the U.S. and a set of ten other advanced economies, over the period 1977 to 2005. For the U.S., we find that the sector-specific skill neutral component of technical change accounts for 18–24% of the overall increase of the skill premium due to technical change, and that the mechanism through which this component of technical change affects the skill premium is via skill-biased structural change.

Keywords: Structural change; Skill premium; E24; E25; J24 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (19)

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Related works:
Working Paper: Skill-biased structural change (2020)
Working Paper: Skill Biased Structural Change (2015)
Working Paper: Skill Biased Structural Change (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:89:y:2022:i:2:p:592-625.

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