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The Skill Premium, Technological Change and Appropriability

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  • Nahuis, Richard
  • Smulders, Sjak

Abstract

This paper demonstrates that an increase in the relative supply of educated workers generates a structural change in the production structure towards a knowledge-intensive production process. This structural shift may ultimately lead to an increase in the return to educated labor despite the increase in their supply. The paper argues that the steady increase in the supply of educated workers that most Western economies have experienced in recent decades may be viewed as the driving force behind the observed pattern of wage inequality. In particular, the paper demonstrates that if firms can appropriate a sufficient share of the intertemporal return from knowledge generating activities of their labor force, a gradual increase in the supply of skilled workers would generate only a temporary reduction in the skill premium followed by a permanent increase in the return to skill. Copyright 2002 by Kluwer Academic Publishers

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  • Nahuis, Richard & Smulders, Sjak, 2002. "The Skill Premium, Technological Change and Appropriability," Journal of Economic Growth, Springer, vol. 7(2), pages 137-156, June.
  • Handle: RePEc:kap:jecgro:v:7:y:2002:i:2:p:137-56
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    1. Galor, Oded & Tsiddon, Daniel, 1997. "Technological Progress, Mobility, and Economic Growth," American Economic Review, American Economic Association, vol. 87(3), pages 363-382, June.
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    Cited by:

    1. Volker Grossmann, 2005. "White-collar employment, inequality, and technological change," Journal of Economics, Springer, vol. 10(1), pages 119-142, December.
    2. Keiichi Kishi, 2015. "Dynamic analysis of wage inequality and creative destruction," Journal of Economics, Springer, vol. 115(1), pages 1-23, May.
    3. Richard Nahuis & Henri de Groot, 2003. "Rising skill premia; you ain't seen nothing yet?," CPB Discussion Paper 20, CPB Netherlands Bureau for Economic Policy Analysis.
    4. Osharin Alexander & Verbus Valery, 2015. "Heterogeneous consumers and market structure in a monopolistically competitive setting," EERC Working Paper Series 15/03e, EERC Research Network, Russia and CIS.
    5. repec:use:tkiwps:022 is not listed on IDEAS
    6. repec:spr:jknowl:v:8:y:2017:i:2:d:10.1007_s13132-016-0434-0 is not listed on IDEAS
    7. Smulders, Sjak & de Nooij, Michiel, 2003. "The impact of energy conservation on technology and economic growth," Resource and Energy Economics, Elsevier, vol. 25(1), pages 59-79, February.
    8. Lei Ji, 2013. "Rethinking directed technical change with endogenous market structure," Documents de Travail de l'OFCE 2013-18, Observatoire Francais des Conjonctures Economiques (OFCE).
    9. Lei JI, 2012. "Rethinking Directed Technical Change with Endogenous Market Structure," DEGIT Conference Papers c017_037, DEGIT, Dynamics, Economic Growth, and International Trade.

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