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Analyzing skilled and unskilled labor efficiencies in the US

Listed author(s):
  • Unel, Bulent

In this paper, I analyze the time paths of the efficiencies of skilled and unskilled labor in a production framework where skilled and unskilled labor are imperfect substitutes. Their implications for economic growth and wage inequality in the US between 1950 and 2005 present two main findings. First, although skilled labor efficiency has a strong upward trend, I find no evidence of acceleration in its growth rate to support the common view that there has been an acceleration in the new skilled-biased technologies. Second, beginning around 1970, there has been a decline in the absolute level of the efficiency of unskilled labor, implying that the decline has played a significant role in the overall productivity slowdown and the substantial widening in the US wage structure.

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File URL: http://www.sciencedirect.com/science/article/pii/S0164-0704(10)00052-2
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Article provided by Elsevier in its journal Journal of Macroeconomics.

Volume (Year): 32 (2010)
Issue (Month): 4 (December)
Pages: 957-967

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Handle: RePEc:eee:jmacro:v:32:y:2010:i:4:p:957-967
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622617

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  1. Per Krusell & Lee E. Ohanian & JosÈ-Victor RÌos-Rull & Giovanni L. Violante, 2000. "Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis," Econometrica, Econometric Society, vol. 68(5), pages 1029-1054, September.
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  3. Lawrence F. Katz & Kevin M. Murphy, 1992. "Changes in Relative Wages, 1963–1987: Supply and Demand Factors," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 35-78.
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  16. Jorgenson, Dale W., 2005. "Accounting for Growth in the Information Age," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 10, pages 743-815 Elsevier.
  17. Unel, Bulent, 2010. "Firm heterogeneity, trade, and wage inequality," Journal of Economic Dynamics and Control, Elsevier, vol. 34(8), pages 1369-1379, August.
  18. Paul Krugman, 1995. "Growing World Trade: Causes and Consequences," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 327-377.
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