Title: Skill Prices, Occupations and Changes in the Wage Structure
Abstract: This paper proposes and estimates a model of occupational choice with time-varying skills prices and heterogeneous human capital to understand the evolution of the wage structure since 1979. A worker’s multi-dimensional skills are exploited differently across different occupations. We allow for a rich specification of technological change which has heterogenous effects on different occupations and different parts of the skill distribution. We estimate the model combining three datasets: (1) O’NET, to measure skill intensity across occupations, (2) NLSY, to identify life-cycle supply effects, and (3) CPS, to estimate the role of technology. The return to inter-personal skills has steadily increased while the returns to cognitive and physical skills have declined. The rise of wage inequality is driven by technological change that favors high-skilled’ individual within occupation. The rise of services and the decline of manual occupations cannot be understood with a competitive labor market model.
Publication Year: 2017
Publication Date: 2017-01-01
Language: en
Type: article
Access and Citation
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot