Wages, Human Capital, and the Allocation of Labor across Sectors
We document for nine countries ranging from rich (Canada, U.S.) to poor (India, Indonesia) that average wages are higher in nonâ€“agriculture than in agriculture. We measure sectoral human capital and find that it accounts for the entire wage gap in the U.S. and most of the wage gaps elsewhere. We develop a multiâ€“sector model that explains these finding if: (i) Mincer returns to schooling are equal in both sectors; (ii) more able workers sort into nonâ€“agriculture; (iii) distortions to the allocation of labor between sectors are negligible in the U.S. and small elsewhere.
|Date of creation:||2014|
|Contact details of provider:|| Postal: Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA|
Web page: http://www.EconomicDynamics.org/
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