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Skill Composition: Exploring a Wage-based Skill Measure

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Author Info
Øivind A. Nilsen, Arvid Raknerud, Marina Rybalka and Terje Skjerpen () (Statistics Norway)

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Abstract

Most studies of heterogeneous labor inputs use classifications of high skilled and low skilled based on workers' educational attainment. In this study we explore a wage-based skill measure using information from a wage equation. Evidence from matched employer--employee data show that skill is attributable to many variables other than educational length, for instance experience and type of education. Applying our wage-based skill measure to a TFP growth analysis, we find that the TFP residual decreases, indicating that more of the change in value-added is picked up by our skill measure than when using a purely education-based measure of skill

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Paper provided by Research Department of Statistics Norway in its series Discussion Papers with number 531.

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Date of creation: Feb 2008
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Handle: RePEc:ssb:dispap:531

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Related research
Keywords: Skill composition; wages; TFP;

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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
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data

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  1. S. Iranzo & Fabiano Schivardi & E. Tosetti, 2006. "Skill dispersion and firm productivity: an analysis with employer-employee matched data," Working Paper CRENoS 200617, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia. [Downloadable!]
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  2. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
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  3. Haegeland, T. & Klette, T.J. & Salvanes, K.G., 1999. "Declining Returns to Education in NOrway? Comparing Estimates Across Cohorts, Sectors and Over Time," Papers 14/99, Norwegian School of Economics and Business Administration-.
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  4. Borghans, Lex & Green, Francis & Mayhew, Ken, 2001. "Skills Measurement and Economic Analysis: An Introduction," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 375-84, July.
  5. Judith K. Hellerstein & David Neumark, 2004. "Production Function and Wage Equation Estimation with Heterogeneous Labor: Evidence from a New Matched Employer-Employee Data Set," NBER Working Papers 10325, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Øivind A. Nilsen, Arvid Raknerud, Marina Rybalka and Terje Skjerpen, 2005. "Lumpy Investments, Factor Adjustments and Productivity," Discussion Papers 441, Research Department of Statistics Norway. [Downloadable!]
  7. Arvid Raknerud & Dag Rønningen & Terje Skjerpen, 2007. "A Method For Improved Capital Measurement By Combining Accounts And Firm Investment Data," Review of Income and Wealth, Blackwell Publishing, vol. 53(3), pages 397-421, 09. [Downloadable!] (restricted)
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