Skill-Biased Structural Change and the Skill Premium
Richard Rogerson (),
Joseph Kaboski and
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Francisco Buera: Federal Reserve Bank of Chicago
No 895, 2015 Meeting Papers from Society for Economic Dynamics
We document for a broad panel of advanced economies that increases in GDP per capita are associated with a shift in the composition of value added to sectors that are intensive in high-skill labor. It follows that further development in these economies leads to an increase in the relative demand for skilled labor. We develop a two-sector model of this process and use it to assess the contribution of this process of skill-biased structural change to the rise of the skill premium in the US over the period 1977 to 2005. We find that these compositional demands account for roughly 30% of the overall increase of the skill premium due to technical change.
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed015:895
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