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Skill Biased Structural Change

Author

Listed:
  • Francisco J. Buera

    (Federal Reserve Bank of Chicago)

  • Joseph P. Kaboski

    (University of Notre Dame)

  • Richard Rogerson

    (Princeton University)

Abstract

We document for a broad panel of advanced economies that increases in GDP per capita are associated with a shift in the composition of value added to sectors that are intensive in high-skill labor. It follows that further development in these economies leads to an increase in the relative demand for skilled labor. We develop a two-sector model of this process and use it to assess the contribution of this process of skill-biased structural change to the rise of the skill premium in the US, and a broad panel of advanced economies, over the period 1977 to 2005. We find that these compositional demands account for between 25 and 30% of the overall increase of the skill premium due to technical change.

Suggested Citation

  • Francisco J. Buera & Joseph P. Kaboski & Richard Rogerson, 2015. "Skill Biased Structural Change," Working Papers 2015-6, Princeton University. Economics Department..
    • Handle: RePEc:pri:econom:2015-6
    as

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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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