scholarly journals Why Has Urban Inequality Increased?

2018 ◽  
Vol 10 (4) ◽  
pp. 1-42 ◽  
Author(s):  
Nathaniel Baum-Snow ◽  
Matthew Freedman ◽  
Ronni Pavan
Keyword(s):  
Production Function ◽  
Wage Inequality ◽  
Strong Evidence ◽  
Technical Change ◽  
Agglomeration Economies ◽  
Unskilled Labor ◽  
Skill Bias ◽  
Urban Inequality

This paper examines mechanisms driving the more rapid increases in wage inequality in larger cities between 1980 and 2007. Production function estimates indicate strong evidence of capital–skill complementarity and increases in the skill bias of agglomeration economies in the context of rapid skill-biased technical change. Immigration shocks are the source of identifying variation across cities in changes to the relative supply of skilled versus unskilled labor. Estimates indicate that changes in the factor biases of agglomeration economies rationalize at least 80 percent of the more rapid increases in wage inequality in larger cities. (JEL J24, J31, O33, R23)

Conclusions

2016 ◽  
Author(s):  
Francesco Caselli
Keyword(s):  
Technical Change ◽  
Unskilled Labor ◽  
Skill Bias ◽  
Skilled And Unskilled Labor ◽  
Over Time

This chapter concludes that the book has presented evidence showing that technology and technical change are more flexible than generally allowed. The efficiency of different factors changes across countries and over time at different rates. Indeed, in some instances the efficiency with which one factor is used can decline while the efficiency of others increases. Since the 1990s, it has been increasingly clear that technical change tends to have a skill bias, but this book's findings reveal that nonneutralities are much more pervasive than that. They also occur across countries, and not just over time. Furthermore, they invest a broader set of inputs: not only skilled and unskilled labor, but also experienced and inexperienced workers, natural and reproducible capital, and a broad labor aggregate and a broad capital aggregate. The book has merely scratched the surface of the likely patterns of nonneutrality that exist across countries and over time.

scholarly journals The Assignment of Workers to Tasks, Wage Distribution, and Technical Change: A Critical Review

2008 ◽  
pp. 12
Author(s):  
Arnaud Dupuy
Keyword(s):  
Production Function ◽  
Wage Inequality ◽  
Technical Change ◽  
Critical Review ◽  
Wage Structure ◽  
Wage Distribution ◽  
Wage Distributions ◽  
General Equilibrium Effect ◽  
Assignment Models ◽  
Equilibrium Effect

This article reviews the literature on two-sided atomless assignment models of workers to tasks. Using simple parametric examples, the fundamental differences between the comparative-advantage and the scale-of-operations models are illustrated. Holding the distributions of abilities and tasks and the production function of worker-task pairs constant, the two principles are shown to produce different wage distributions and wage inequality. These models are useful to evaluate the general equilibrium effect of technical change on the wage structure. In all models, Skill Biased Technical Change that impacts the production function of worker-task pairs leads to rising wage inequality.

Skilled Labor, Unskilled Labor, and Experience Over Time

2016 ◽  
Author(s):  
Francesco Caselli
Keyword(s):  
Technical Change ◽  
The United States ◽  
Elasticity Of Substitution ◽  
Relative Wage ◽  
Unskilled Labor ◽  
Skilled Workers ◽  
Skill Bias ◽  
Unskilled Workers ◽  
Joint Behavior ◽  
Over Time

This chapter examines what the joint behavior of relative wage and relative supply reveal about the underlying changes in technology, with a focus on the United States. It distinguishes workers by two characteristics: skill and experience. It classifies the labor force into four kinds of workers: experienced skilled workers, inexperienced skilled workers, experienced unskilled workers, and inexperienced unskilled workers. The equation takes into account the quantities of unskilled inexperienced inputs, unskilled experienced inputs, skilled inexperienced inputs, and skilled experienced inputs, as well as the elasticity of substitution between unskilled inexperienced and unskilled experienced workers, and skilled inexperienced and skilled experienced ones. The results confirm many previous findings of a significant skill bias in technical change between 1960 and 2010, and also reveal an experience bias in technical change over roughly the same period, especially among skilled workers and since the 1980s.

Skilled and Unskilled Labor

2016 ◽  
Author(s):  
Francesco Caselli
Keyword(s):  
Relative Efficiency ◽  
Wage Rate ◽  
School Quality ◽  
Elasticity Of Substitution ◽  
Perfect Competition ◽  
Relative Wage ◽  
Unskilled Labor ◽  
Skilled Worker ◽  
Skill Bias ◽  
Skilled And Unskilled Labor

This chapter examines how skilled and unskilled labor vary across countries by taking into account the wage rate for skilled labor and the wage rate for unskilled labor, based on the assumption that labor markets approximate conditions of perfect competition. The equation to be used implies that the relative wage of a skilled worker is decreasing with the relative supply of skills. However, for a given supply of skills the relative wage also depends on the relative efficiency with which skills are used. The chapter first estimates the skill bias, the relative supply of skills, and the skill premium before deriving a calibrated value for the elasticity of substitution. It then presents the key empirical results for the skill bias in technology across countries and goes on to discuss alternative skill thresholds. It also considers the implications of differences in school quality and the implications of capital–skill complementarity.

Introduction and Preliminaries

2016 ◽  
Author(s):  
Francesco Caselli
Keyword(s):  
Technical Change ◽  
Relative Efficiency ◽  
Natural Capital ◽  
Physical Capital ◽  
Mineral Deposits ◽  
Unskilled Labor ◽  
Poor Countries ◽  
Absolute Efficiency ◽  
Rich Countries ◽  
Analytical Tools

This book examines how the mode of production, or production technology, varies systematically across countries, depending on their endowments of different factors of production. Using aggregate production functions as analytical tools, the book shows that technology differences and technical change are factor biased: they change not only the overall efficiency with which a country exploits its bundle of productive inputs, but also the relative efficiency with which different factors contribute to production. It argues that the efficiency with which skilled labor is used relative to unskilled labor is greater in richer countries than in poorer countries. It also explains why the efficiency with which reproducible capital (equipment and structure) is used relative to natural capital (mineral deposits, land, timber, etc.) is higher in rich countries, and the absolute efficiency with which physical capital is used appears to be not lower, and may even be higher, in poor countries.

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