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Earnings Inequality and Skill-Biased Technological Change with Endogenous Choice of Education

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Author Info
Árpád Ábrahám

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Abstract

This article analyzes the impact of stochastic skill-biased technological change on earnings inequality in a general equilibrium OLG model. Wage dispersion is determined by the heterogeneity of skills by allowing for productivity differences due to education, ability, and age. The model performs well in reproducing stylized facts on the time pattern of the U.S. wage distribution and human capital accumulation. In particular, it shows that slow adjustment of the supply of educated labor can itself explain the nonmonotonic time pattern of the college premium. (JEL: D31, J24, J31) (c) 2008 by the European Economic Association.

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File URL: http://www.mitpressjournals.org/doi/pdfplus/10.1162/JEEA.2008.6.2-3.695
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Article provided by MIT Press in its journal Journal of the European Economic Association.

Volume (Year): 6 (2008)
Issue (Month): 2-3 (04-05)
Pages: 695-704
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Handle: RePEc:tpr:jeurec:v:6:y:2008:i:2-3:p:695-704

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Find related papers by JEL classification:
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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This page was last updated on 2008-12-19.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.