Returns to Human Capital and Investment in New Technology

Rodolfo Luzio, Steven Dunaway and Martin Kaufman

No 2001/133, IMF Working Papers from International Monetary Fund

Abstract: This paper presents a simple framework that illustrates the link between skill-based wage differentiation and human capital acquisition given skill-biased technical progress. The analysis points to the economic costs resulting from labor market and income redistribution policies that prevent the skill premium from playing its role in fostering human capital accumulation and the adoption of new technologies. The study compares key economic indicators among Canada, France, Germany, the United Kingdom, and the United States. Differences in wage differen-tiation and investment in new technologies among these countries could be related to policies affecting labor markets; such practices may reflect social choices.

Keywords: WP; wage premium; pay; premium; New technology; human capital; income redistribution policies; wage dispersion; premium in the United States; dispersion in Germany; earnings inequality; wage premia; wage differentiation; wage earnings; skill premium; earnings distribution; Wages; Skilled labor; Technological innovation (search for similar items in EconPapers)
Pages: 30
Date: 2001-09-01
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Citations: View citations in EconPapers (6)

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