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Title: Long-Run Substitutability between More and Less Educated Workers: Evidence from U.S. States, 19501990

Citation Type: Journal Article

Publication Year: 2005

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Abstract: We estimate the aggregate long-run elasticity of substitution between more educated workers and less educated workers (the slope of the inverse demand curve for more relative to less educated workers) at the U.S. state level. Our data come from the (five) 1950-1990 decennial censuses. Our empirical approach allows for state and time fixed effects and relies on time- and state-dependent child labor and compulsory school attendance laws as instruments for (endogenous) changes in the relative supply of more educated workers. We find the aggregate long-run elasticity of substitution between more and less educated workers to be around 1.5. © 2005 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Authors: Peri, Giovanni; Ciccone, Antonio

Periodical (Full): Review of Economics & Statistics

Issue: 4

Volume: 87

Pages: 652-663

Data Collections: IPUMS USA

Topics: Education, Labor Force and Occupational Structure

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