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Technological Change and the Education Premium in Canada: Sectoral Evidence

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Author Info
Jean Farès
Terence Yuen
Abstract

It has been well documented that the education premium measured by the wage difference between university and high school graduates has remained constant over the past two decades in Canada. Despite this stable pattern at the aggregate level, skill-biased technology could have important implications for the inter-industry wage structure. In a multi-sector economy where technological innovations are skewed towards certain industries, imperfect labour mobility implies a positive relationship between the education premium and the technological change in industry. Using data from the Survey of Consumer Finance and the Labour Force Survey, the authors obtain empirical results that would appear to confirm this link: university graduates in research and development- intensive industries are better paid . Yet, this positive correlation is largely due to the fact that high-tech industries attract more professionals who are more educated than the average university graduate.

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Paper provided by Bank of Canada in its series Working Papers with number 03-18.

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Length: 52 pages
Date of creation: 2003
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Handle: RePEc:bca:bocawp:03-18

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Keywords: Labour markets;

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Find related papers by JEL classification:
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General

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    Other versions:
  4. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March. [Downloadable!] (restricted)
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  14. Kevin M. Murphy & W. Craig Riddell & Paul M. Romer, 1998. "Wages, Skills, and Technology in the United States and Canada," NBER Working Papers 6638, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  18. MacGee, James & Yu, Weiqiu, 2000. "The Behaviour of Productivity Growth Rates and Composition Bias in the Labour Input," Applied Economics Letters, Taylor and Francis Journals, vol. 7(9), pages 595-98, September. [Downloadable!] (restricted)
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