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Disaggregating Labor Payments by Skill Level in GTAP

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Listed:
  • Liu, Jing
  • Nico van Leeuwen
  • Tri Thanh Vo
  • Rod Tyers
  • Thomas W. Hertel

Abstract

This paper outlines an approach to disaggregating labor payments in the GTAP, global economic data base. The split between low- and high-skilled labor is based on occupational data. High-skilled labor is assumed to consist of managers, administrators, professionals, and para-professionals. Data are gathered on this occupational split, by sector, in fifteen different economies, and these are mapped to GTAP sectors. Regression analysis shows a systematic relationship between GDP per capita and the national stock of tertiary and secondary educated labor on the one hand, and the sectoral labor payments split on the other. This model is used to predict labor splits, by sector, in the remaining GTAP regions. The results are evaluated in terms of the implied economywide skilled -unskilled labor payment ratio. Overall, the results seem promising enough to warrant inclusion in the GTAP, version 4 data base.

Suggested Citation

  • Liu, Jing & Nico van Leeuwen & Tri Thanh Vo & Rod Tyers & Thomas W. Hertel, 1998. "Disaggregating Labor Payments by Skill Level in GTAP," GTAP Technical Papers 314, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    • Handle: RePEc:gta:techpp:314
    Note: GTAP Technical Paper No. 11
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    References listed on IDEAS

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    1. Nehru, Vikram & Swanson, Eric & Dubey, Ashutosh, 1993. "A new database on human capital stock : sources, methodology and results," Policy Research Working Paper Series 1124, The World Bank.
    2. Tyers, R. & Yang, Y., 1996. "Trade with Asia and Skill Upgrading: Effects on Factor Markets in the Older Industrial Countries," CEPR Discussion Papers 346, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    3. Rod Tyers & Yongzheng Yang, 1997. "Trade with Asia and skill upgrading: Effects on labor markets in the older industrial countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 133(3), pages 383-418, September.
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