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Skill supply and biased technical change

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  • Crifo, Patricia

Abstract

This article contributes to the debate on skill-biased technical change by studying the dynamics of skill supply and wage inequality in an endogenous growth model with ability-biased technical progress. Due to a discouragement effect, rising within groups inequality reduces incentives to become educated for ordinary-ability workers. This mechanism generates a non-monotonic relationship between the growth rate and skill supply driving wage inequality upward during periods of accelerating technical change. This theoretical explanation is consistent with the apparent ambiguous relationship between the relative skill supply and inequality in the last decades in several OECD countries.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 15 (2008)
Issue (Month): 5 (October)
Pages: 812-830

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Handle: RePEc:eee:labeco:v:15:y:2008:i:5:p:812-830

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Web page: http://www.elsevier.com/locate/labeco

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Keywords: Wage Inequality Biased Technical Change Skill Supply Innovation-Driven Growth;

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Cited by:
  1. Dupuy, Arnaud, 2013. "The Assignment of Workers to Tasks with Endogenous Supply of Skills," IZA Discussion Papers 7303, Institute for the Study of Labor (IZA).
  2. Julie L. Hotchkiss & Menbere Shiferaw, 2011. "Decomposing the education wage gap: everything but the kitchen sink," Review, Federal Reserve Bank of St. Louis, issue July, pages 243-272.

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