Human-capital investment and the wage gap
According to empirical studies, the wage differential by skills evolved non-monotonically in the past decades although the relative supply of skilled labor steadily increased. The present paper provides a theoretical explanation for this finding. In our setting, technological change intertemporally alters the human-capital investment incentives of heterogeneous individuals. As a consequence of changing incentives, the time path of the relative wage is U-shaped while there is a rise in the share of skilled workers.
Volume (Year): 19 (2002)
Issue (Month): 4 ()
|Note:||Received: November 28, 2000; revised version: January 30, 2001|
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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.:
- Oded Galor & Omer Moav, 2000.
"Ability-Biased Technological Transition, Wage Inequality, and Economic Growth,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 115(2), pages 469-497.
- Oded Galor & Omer Moav, 1998. "Ability Biased Technological Transition, Wage Inequality, and Economic Growth," Working Papers 98-14, Brown University, Department of Economics.