The Demand-Supply-Demand Twist: How the Wage Structure Got More Convex
AbstractIn the 1990s, in many countries, log wages became a more convex function of education: returns to college increased and returns to intermediate education declined. This paper argues that an important cause of this convexi cation was a two-stage demand-supply interaction: an increased demand for both sorts of educated workers stimulated a supply response; the increased supply of intermediate-educated further increased the demand for college-educated workers, because these two types of labour are complementary. This argument is supported by an empirical equilibrium model of savings and educational choices for Mexico, where the degree of convexi cation was ampli ed by loosening credit constraints.
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Bibliographic InfoPaper provided by The Rimini Centre for Economic Analysis in its series Working Paper Series with number 48_09.
Date of creation: Jan 2009
Date of revision: Jan 2009
Wage Inequality; Human Capital; Empirical Equilibrium Model; Latin America;
Find related papers by JEL classification:
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
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- Chiara Binelli & Orazio Attanasio, 2010.
"Mexico in the 1990s: the Main Cross-Sectional Facts,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 238-264, January.
- Orazio Attanasio & Chiara Binelli, 2009. "Code and data files for "Mexico in the 1990s: the Main Cross-Sectional Facts"," Computer Codes 09-201, Review of Economic Dynamics.
- Vincenzo Caponi, 2009.
"Intergenerational Transmission of Abilities and Self Selection of Mexican Immigrants,"
002, Ryerson University, Department of Economics.
- Vincenzo Caponi, 2011. "Intergenerational Transmission Of Abilities And Self‐Selection Of Mexican Immigrants," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(2), pages 523-547, 05.
- Vincenzo Caponi, 2007. "Intergenerational Transmission of Abilities and Self Selection of Mexican Immigrants," Working Paper Series 20-07, The Rimini Centre for Economic Analysis, revised Jul 2007.
- Caponi, Vincenzo, 2006. "Intergenerational Transmission of Abilities and Self Selection of Mexican Immigrants," IZA Discussion Papers 2431, Institute for the Study of Labor (IZA).
- Vincenzo Caponi, 2009. "Intergenerational Transmission of Abilities and Self Selection of Mexican Immigrants," 2009 Meeting Papers 1144, Society for Economic Dynamics.
- Andrea Canidio, 2012. "The Determinants of Long-Run Inequality," CEU Working Papers 2012_10, Department of Economics, Central European University, revised 20 Mar 2012.
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