Skill Heterogeneity and the Business Cycle
AbstractThis paper extends the real business cycle framework to incorporate ex ante skill heterogeneity among workers. Consistent with the empirical evidence, skilled and unskilled workers in the model face the same degree of cyclical variation in real wages, although unskilled workers are subject to substantially higher procyclical variation in employment. Systematic cyclical changes in the average skill level of employed workers are shown to induce bias in standard aggregate measures of cyclical variation in the labour input, productivity, and the real wage. The introduction of skill heterogeneity improves the model's ability to match the empirical correlation between total hours and the real wage, but the correlation between total hours and labour productivity remains higher than it does in the data.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 29 (1996)
Issue (Month): 4 (November)
Contact details of provider:
Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4
Web page: http://economics.ca/cje/
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Lahiri, Radhika & Magnani, Elisabetta, 2012. "Endogenous skill heterogeneity and inflation," Economic Modelling, Elsevier, vol. 29(5), pages 1745-1756.
- CASTRO, Rui & COEN-PIRANI, Daniele, 2005.
"Why Have Aggregate Skilled Hours Become So Cyclical Since the Mid-1980's?,"
Cahiers de recherche
2005-19, Universite de Montreal, Departement de sciences economiques.
- Rui Castro & Daniele Coen-Pirani, 2008. "WHY HAVE AGGREGATE SKILLED HOURS BECOME SO CYCLICAL SINCE THE MID-1980s?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(1), pages 135-185, 02.
- Rui Castro & Daniele Coen-Pirani, . "Why Have Aggregate Skilled Hours Become So Cyclical Since the Mid 1980s?," GSIA Working Papers 2006-E27, Carnegie Mellon University, Tepper School of Business.
- CASTRO, Rui & COEN-PIRANI, Daniele, 2005. "Why Have Aggregate Skilled Hours Become so Cyclical since the Mid-1980’s?," Cahiers de recherche 24-2005, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Lilia Maliar & Serguei Maliar, 1999.
"- Differential Responses Of Labor Supply Across Productivity Groups,"
Working Papers. Serie AD
1999-22, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Maliar, Lilia & Maliar, Serguei, 2000. "Differential Responses of Labor Supply across Productivity Groups," Journal of Macroeconomics, Elsevier, vol. 22(1), pages 85-108, January.
- Finn E. Kydland & D'Ann M. Petersen, 1997. "Does being different matter?," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q III, pages 2-11.
- Lilia Maliar & Serguei Maliar, 2003.
"Indivisible Labor, Lotteries And Idiosyncratic Productivity Shocks,"
Working Papers. Serie AD
2003-38, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Maliar, Lilia & Maliar, Serguei, 2004. "Indivisible-labor, lotteries and idiosyncratic productivity shocks," Mathematical Social Sciences, Elsevier, vol. 48(1), pages 23-35, July.
- Linnea Polgreen & Pedro Silos, 2006. "Crude substitution: the cyclical dynamics of oil prices and the college premium," Working Paper 2006-14, Federal Reserve Bank of Atlanta.
- Michael Sattinger & Sumati Srinivas, 2003. "The Employment-Productivity Relation with Employment Criteria," Discussion Papers 03-07, University at Albany, SUNY, Department of Economics.
- Cazzavillan, Guido & Olszewski, Krzysztof, 2011.
"Skill-biased technological change, endogenous labor supply and growth: A model and calibration to Poland and the US,"
Research in Economics,
Elsevier, vol. 65(2), pages 124-136, June.
- Guido Cazzavillan & Krzysztof Olszewski, 2009. "Skill-biased technological change and endogenous labor supply in EU Transition Economies and the US," Working Papers 2009_12, Department of Economics, University of Venice "Ca' Foscari".
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Prof. Werner Antweiler).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.