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Skill Polarization in Local Labour Markets under Share-Altering Technical Change

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  • Alberto Dalmazzo

    ()

  • Antonio Accetturo
  • Guido de Blasio

    ()

Abstract

This paper considers the “share-altering†technical change hypothesis in a spatial general equilibrium model where individuals have different levels of skills. Building on a simple Cobb-Douglas production function, our model shows that the implementation of skill-biased technologies requires a sufficient proportion of highly educated individuals. Moreover, when technical progress is such to disproportionately replace middle-skill jobs, the local distribution of skill will exhibit “fat-tails†, where the proportion of both highly skilled and low-skilled workers increases. These predictions are consistent with recent existing evidence.

Suggested Citation

  • Alberto Dalmazzo & Antonio Accetturo & Guido de Blasio, 2012. "Skill Polarization in Local Labour Markets under Share-Altering Technical Change," ERSA conference papers ersa12p288, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa12p288
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    Cited by:

    1. Forslid, Rikard & Okubo, Toshihiro, 2014. "Spatial sorting with heterogeneous firms and heterogeneous sectors," Regional Science and Urban Economics, Elsevier, vol. 46(C), pages 42-56.
    2. Mario Reinhold, 2016. "On the Link between Job Polarisation and Wage Inequality - A regional approach for Germany," ERSA conference papers ersa16p361, European Regional Science Association.
    3. Feder, Christophe & Kataishi, Rodrigo Ezequiel, 2017. "Decentralization in Heterogeneous Regions: A Biased Technological Change Approach," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201703, University of Turin.
    4. Reinhold, Mario, 2016. "On the Link between Job Polarisation and Wage Inequality in Germany," Annual Conference 2016 (Augsburg): Demographic Change 145802, Verein für Socialpolitik / German Economic Association.
    5. Antonio Accetturo, 2014. "Political selection in the skilled city," Temi di discussione (Economic working papers) 956, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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