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Human-capital investment and the wage gap

Author

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  • Jürgen Meckl

    () (Department of Economics, University of Konstanz, Box D 146, 78457 Konstanz, GERMANY)

  • Stefan Zink

    () (Department of Economics, University of Konstanz, Box D 146, 78457 Konstanz, GERMANY)

Abstract

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.

Suggested Citation

  • Jürgen Meckl & Stefan Zink, 2002. "Human-capital investment and the wage gap," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 19(4), pages 853-859.
  • Handle: RePEc:spr:joecth:v:19:y:2002:i:4:p:853-859
    Note: Received: November 28, 2000; revised version: January 30, 2001
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    References listed on IDEAS

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    1. 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.
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    1. repec:wsi:wschap:9789813224919_0012 is not listed on IDEAS
    2. Jürgen Meckl & Stefan Zink, 2004. "Solow and heterogeneous labour: a neoclassical explanation of wage inequality," Economic Journal, Royal Economic Society, vol. 114(498), pages 825-843, October.
    3. Hartmut Egger & Udo Kreickemeier, 2017. "Fairness, Trade, and Inequality," World Scientific Book Chapters,in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 12, pages 339-380 World Scientific Publishing Co. Pte. Ltd..

    More about this item

    Keywords

    Human-capital investment; Wage inequality.;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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