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Skill supply and biased technical change

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  • Crifo, Patricia

Abstract

This article contributes to the debate on skill-biased technical change by studying the dynamics of skill supply and wage inequality in an endogenous growth model with ability-biased technical progress. Due to a discouragement effect, rising within groups inequality reduces incentives to become educated for ordinary-ability workers. This mechanism generates a non-monotonic relationship between the growth rate and skill supply driving wage inequality upward during periods of accelerating technical change. This theoretical explanation is consistent with the apparent ambiguous relationship between the relative skill supply and inequality in the last decades in several OECD countries.

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  • Crifo, Patricia, 2008. "Skill supply and biased technical change," Labour Economics, Elsevier, vol. 15(5), pages 812-830, October.
    • Handle: RePEc:eee:labeco:v:15:y:2008:i:5:p:812-830
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    Cited by:

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    2. Arnaud Dupuy, 2015. "The Assignment of Workers to Tasks with Endogenous Supply of Skills," Economica, London School of Economics and Political Science, vol. 82(325), pages 24-45, January.
    3. Julie L. Hotchkiss & Menbere Shiferaw, 2011. "Decomposing the education wage gap: everything but the kitchen sink," Review, Federal Reserve Bank of St. Louis, vol. 93(July), pages 243-272.
    4. T. Gries & R. Grundmann & I. Palnau & M. Redlin, 2017. "Innovations, growth and participation in advanced economies - a review of major concepts and findings," International Economics and Economic Policy, Springer, vol. 14(2), pages 293-351, April.
    5. repec:dau:papers:123456789/7769 is not listed on IDEAS
    6. Nick Clifton & Robert Huggins & Brian Morgan & Piers Thompson, 2015. "An appropriate tool for entrepreneurial learning in SMEs? The case of the 20Twenty Leadership Programme," Local Economy, London South Bank University, vol. 30(5), pages 534-556, August.
    7. Masashi Tanaka, 2013. "Human Capital Investment, Credentialing, and Wage Differentials," Discussion Papers in Economics and Business 13-31-Rev., Osaka University, Graduate School of Economics, revised Aug 2017.

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