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Skill Polarization in Local Labour Markets under Share-Altering Technical Change

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  • Alberto Dalmazzo

    ()

  • Antonio Accetturo
  • Guido de Blasio

    ()

Abstract

This paper considers the “share-altering†technical change hypothesis in a spatial general equilibrium model where individuals have different levels of skills. Building on a simple Cobb-Douglas production function, our model shows that the implementation of skill-biased technologies requires a sufficient proportion of highly educated individuals. Moreover, when technical progress is such to disproportionately replace middle-skill jobs, the local distribution of skill will exhibit “fat-tailsâ€, where the proportion of both highly skilled and low-skilled workers increases. These predictions are consistent with recent existing evidence.

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Bibliographic Info

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa12p288.

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Date of creation: Oct 2012
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Handle: RePEc:wiw:wiwrsa:ersa12p288

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  17. Michaels, Guy & Natraj, Ashwini & Van Reenen, John, 2010. "Has ICT Polarized Skill Demand? Evidence from Eleven Countries over 25 years," CEPR Discussion Papers 7898, C.E.P.R. Discussion Papers.
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