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Long-Run Substitutability between More and Less Educated Workers: Evidence from U.S. States 1950-1990

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Antonio Ciccone ()
Giovanni Peri

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Abstract

We estimate the aggregate long-run elasticity of substitution between more and less educated workers (the slope of the demand curve for more relative to less educated workers) at the US state level. Our data come from the (five)1950-1990 decennial censuses. Our empirical approach allows for state and time fixed effects and relies on time and state dependent child labor and compulsory school attendance laws as instruments for (endogenous) changes in the relative supply of more educated workers. We find the aggregate long-run elasticity of substitution between more and less educated workers to be around 1.5.

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Publisher Info
Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 764.

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Date of creation: Jun 2004
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Handle: RePEc:upf:upfgen:764

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Related research
Keywords: Elasticity of Substitution; Education; U.S. States; Skill Biased Technological Change;

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Find related papers by JEL classification:
J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
R1 - Urban, Rural, and Regional Economics - - General Regional Economics
O3 - Economic Development, Technological Change, and Growth - - Technological Change

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Damien Echevin & Fabrice Murtin, 2007. "What Determines Productivity in Senegal? Sectoral Disparities and the Dual Labor," Cahiers de recherche 07-15, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke, revised 2008. [Downloadable!]
  2. Peri, Giovanni & Ottaviano, Gianmarco L. P., 2006. "Rethinking the Effects of Immigration on Wages," Working Papers 06-34, University of California at Davis, Department of Economics. [Downloadable!]
    Other versions:
  3. Kevin H. O'Rourke & Ahmed S. Rahman & Alan M. Taylor, 2008. "Luddites and the Demographic Transition," NBER Working Papers 14484, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Peri, Giovanni, 2005. "International Migrations: Some Comparisons and Lessons for the European Union," Working Papers 06-36, University of California at Davis, Department of Economics. [Downloadable!]
  5. Susana Iranzo & Giovanni Peri, 2009. "Migration and Trade: Theory with an Application to the Eastern-Western European Integration," CReAM Discussion Paper Series 0905, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London. [Downloadable!]
  6. Gianmarco I.P. Ottaviano & Giovanni Peri, 2006. "Rethinking the Gains from Immigration: Theory and Evidence from the U.S," Working Papers 2006.52, Fondazione Eni Enrico Mattei. [Downloadable!]
    Other versions:
  7. Susanna Iranzo & Fabiano Schivardi & Elisa Tosetti, 2006. "Skill dispersion and firm productivity; an analysis with employer-employee matched data," Temi di discussione (Economic working papers) 577, Bank of Italy, Economic Research Department. [Downloadable!]
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  8. Francesco D'Amuri & Gianmarco I. P. Ottaviano & Giovanni Peri, 2008. "The Labor Market Impact of Immigration in Western Germany in the 1990's," Temi di discussione (Economic working papers) 687, Bank of Italy, Economic Research Department. [Downloadable!]
    Other versions:
  9. Peri, Giovanni & Iranzo, Susana, 2006. "Schooling Externalities, Technology and Productivity: Theory and Evidence from U.S. States," Working Papers 06-35, University of California at Davis, Department of Economics. [Downloadable!]
    Other versions:
  10. Bernd Fitzenberger & Karsten Kohn, 2006. "Skill Wage Premia, Employment, and Cohort Effects: Are Workers in Germany All of the Same Type?," IZA Discussion Papers 2185, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  11. Peri, Giovanni, 2006. "The Effects of Immigration on California's Labor Market," Working Papers 06-37, University of California at Davis, Department of Economics. [Downloadable!]
  12. Bulent Unel, . "Firm Heterogeneity, Trade, and Wage Inequality," Departmental Working Papers 2008-02, Department of Economics, Louisiana State University. [Downloadable!]
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