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What Accounts for the U.S.-Canada Education-Premium Difference?

Oleksiy Kryvtsov () and Alexander Ueberfeldt

Staff Working Papers from Bank of Canada

Abstract: This paper analyzes the differences in wage ratios of university graduates to less than university graduates, the education premium, in Canada and the United States from 1980 to 2000. Both countries experienced a similar increase in the fraction of university graduates and a similar increase in skill biased technological change based on capital-embodied technological progress, but only the United States had a large increase in the education premium. Using a calibrated Krussel et al. (2000) model, the paper finds that the cross country difference is in equal proportion due to the effective stock of capital equipment, the growth in skilled labor supply relative to unskilled labor and the relative abundance of skilled population in 1980. Growth in the working age population is unimportant for the difference.

Keywords: Labour markets; Productivity (search for similar items in EconPapers)
JEL-codes: E24 E25 J24 J31 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2009
New Economics Papers: this item is included in nep-bec, nep-dge, nep-edu, nep-lab and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocawp:09-4

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