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Title: Skill-Biased Structural Change

Citation Type: Journal Article

Publication Year: 2022

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Abstract: Using a broad panel of advanced economies, we document that increases in GDP per capita are associated with a systematic shift in the composition of value added to sectors that are intensive in high-skill labour, a process we label as skill-biased structural change. It follows that further development in these economies leads to an increase in the relative demand for skilled labour. We develop a quantitative two-sector model of this process as a laboratory to assess the sources of the rise of the skill premium in the U.S. and a set of ten other advanced economies, over the period 1977 to 2005. For the U.S., we find that the sector-specific skill neutral component of technical change accounts for 18–24% of the overall increase of the skill premium due to technical change, and that the mechanism through which this component of technical change affects the skill premium is via skill-biased structural change.

Url: https://doi.org/10.1093/restud/rdab035

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Authors: Buera, Francisco J; Kaboski, Joseph P; Rogerson, Richard; Vizcaino, Juan I

Periodical (Full): The Review of Economic Studies

Issue: 2

Volume: 89

Pages: 592-625

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Other

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