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.

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.

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.

Skills and Capital Over Time and Across Countries

2016 ◽  
Author(s):  
Francesco Caselli
Keyword(s):  
Technical Change ◽  
Relative Efficiency ◽  
The United States ◽  
Elasticity Of Substitution ◽  
Positive Trend ◽  
Technology Choice ◽  
Skilled Workers ◽  
Skill Bias ◽  
Unskilled Workers ◽  
Using Data

This chapter examines whether the trends in skill bias observed in the United States are common to other economies and extends the time series analysis to include capital. It first estimates, for each country, the skill bias from data on the relative supply of skills and the relative wages of skilled workers before constructing labor supply in units of equivalent unskilled workers. Finally, it calculates the augmentation coefficients using data on overall labor and capital shares. The results show that skill-biased technical change is a remarkably global phenomenon and that every country registers a positive trend in the relative efficiency of skilled labor. When the elasticity of substitution between two inputs is less than 1, technology choice shifts toward the input that becomes more scarce.

scholarly journals The Elasticity of Substitution between Skilled and Unskilled Labor: A Meta-Analysis

2020 ◽  
Author(s):  
Tomas Havranek ◽  
Zuzana Irsova ◽  
Lubica Laslopova ◽  
Olesia Zeynalova
Keyword(s):  
Wage Inequality ◽  
Meta Analysis ◽  
Model Averaging ◽  
Developed Countries ◽  
Elasticity Of Substitution ◽  
Unskilled Labor ◽  
Common View ◽  
The Us ◽  
Skilled And Unskilled Labor ◽  
Frequentist Model Averaging

A key parameter in the analysis of wage inequality is the elasticity of substitution between skilled and unskilled labor. We question the common view that the elasticity exceeds 1. Two biases, publication and attenuation, conspire to pull the mean elasticity reported in the literature to 1.9. After correcting for the biases, the literature is consistent with the elasticity in the US of 0.6--0.9. Our analysis relies on 729 estimates of the elasticity collected from 76 studies as well as 37 controls that reflect the context in which the estimates were obtained. We use recently developed nonlinear techniques to correct for publication bias and employ Bayesian and frequentist model averaging to address model uncertainty. Our results suggest that, first, insignificant estimates of the elasticity are underreported. Second, because researchers typically estimate the elasticity's inverse, measurement error exaggerates the elasticity, and we show the exaggeration is substantial. Third, elasticities are systematically larger for developed countries, translog estimation, and methods that ignore endogeneity.

An Endogenous Technology Framework

2016 ◽  
Author(s):  
Francesco Caselli
Keyword(s):  
Factor Model ◽  
Optimal Choice ◽  
Elasticity Of Substitution ◽  
Unskilled Labor ◽  
Two Factors ◽  
Skilled And Unskilled Labor ◽  
Factors Of Production ◽  
Relative Factor ◽  
Empirical Framework ◽  
Endogenous Technology

This chapter presents an endogenous technology framework capable of rationalizing the finding that technology differences are biased toward skilled labor, reproducible capital, and labor. In this framework, firms in each country choose a technology characterized by a particular combination of efficiency units attached to different inputs. The optimal choice of technology depends on relative factor prices and, therefore, on relative factor supplies. The chapter first develops the analysis for a production function with only skilled and unskilled labor before extending the model to feature the four factors of production used in the empirical framework. The two-factor model establishes the conditions under which the intuition that countries will choose technologies that augment the abundant factor is valid. It shows that the key parameter is the elasticity of substitution between the two factors of production.

Immigration and Security—Post 9/11 United States

2018 ◽  
Vol 17 (4) ◽  
pp. 451-472
Author(s):  
Nalanda Roy
Keyword(s):  
United States ◽  
September 11 ◽  
Family Reunification ◽  
Economic Interest ◽  
Unskilled Labor ◽  
The Us ◽  
Skilled And Unskilled Labor ◽  
The Way

AbstractThis article explores the changing relationship between immigration and security in the post-9/11 United States. When it comes to immigration before 9/11, security was not the overarching concern in the US; rather, the focus was on economic interest, skilled and unskilled labor, family reunification, etc. However, immediately after 9/11, security became indisputably prioritized. In fact, September 11 changed the way Americans started to look at security, and this led to a thickening of the balance between the two.

scholarly journals Dual-Labor Market and Unemployment Compensation

ECONOMICS ◽  
2020 ◽  
Vol 8 (2) ◽  
pp. 21-35
Author(s):  
Taro Abe
Keyword(s):  
Labor Market ◽  
Wage Rate ◽  
Competitive Market ◽  
Relative Wage ◽  
Dual Labor Market ◽  
Unemployment Compensation ◽  
Imperfectly Competitive ◽  
The Impact ◽  
Demand Constraint ◽  
Economic Regime

AbstractThis paper discusses the impact of unemployment compensation on the employment and wages of regular and non-regular labor in a dual-labor market. The model in this paper assumes an effective demand constraint and an imperfectly competitive market. The results obtained are as follows. An increase in unemployment compensation increases the wages of regular labor to maintain its productivity. However, this temporarily decreases the employment of regular labor, so that the productivity and wages of non-regular labor decrease. The result is an increase in the relative wage rate of regular labor and the relative amount of non-regular labor employed. This result is independent of any economic regime. In terms of the impact on employment volume, the existence of two regimes, one wage-driven and one profit-driven, is confirmed. However, the effect on employment is weaker if unemployment compensation is financed by taxing profits.

scholarly journals Spatial Dynamics of Internal Migration Flows of the Skilled and Unskilled in Mexico

2020 ◽  
Author(s):  
Miguel Flores Segovia ◽  
Eliud Silva
Keyword(s):  
Internal Migration ◽  
Census Data ◽  
Relative Concentration ◽  
Spatial Dynamics ◽  
Unskilled Labor ◽  
Geographical Patterns ◽  
Economic Agglomeration ◽  
Skilled And Unskilled Labor ◽  
Migratory Patterns ◽  
Relationship Of

ABSTRACT: The dynamics of the internal migration is a crucial element in the composition of the workforce of a certain region, so its analysis contributes to the better understanding of labor markets and sociodemographic changes in a region. In order to characterize the most recent patterns of migratory flows of skilled and unskilled labor, census data are considered for the periods 1995-2000, 2005-2010 and 2010-2015. The analysis considers different indicators that describe the intensity and relative concentration of interstate migration. Changes in migratory patterns are evident; a lower concentration of internal migration whose effect is more marked for unskilled labor. That is, it is observed that the number of states that play a preponderant role in the redistribution of labor in Mexico has increased. The relationship of domestic labor mobility is evident to the regional transformation as a result of new geographical patterns of location of investment, production and economic agglomeration.

scholarly journals A study on the effect of productivity on the wage level, with emphasis on the productivity of skilled and unskilled labor

Accounting ◽  
2018 ◽  
pp. 93-100 ◽  
Author(s):  
Hossein Akbari Fard ◽  
Sayyed Abdolmajid Jalaee ◽  
Seyed Bagher Fazayel Ardakani
Keyword(s):  
Unskilled Labor ◽  
Wage Level ◽  
Skilled And Unskilled Labor

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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