Arbeitspapier
Substitution and Complementarity under Comparative Advantage and the Accumulation of Human Capital
The paper applies Ricardo's principle of comparative advantage to analyze the substitutability between types of labor. The problem of having to classify labor in a small number of types in e.g. standard CES models are avoided by applying a continuum of worker and job types, where better skilled workers have a comparative advantage in more complex jobs. The complementarity matrix,which is derived by inverting the substitution matrix, exhibits attractive features. The matrix depends only on the wage distribution and a single parameter, which is dubbed the complexity dispersion parameter.A particularly intriguing application is the accumulation of human capital. Aninvestment in human capital reduces the supply of low-skilled and increases thesupply of highly skilled workers, therefore compressing wage differentials. The training of one skill group will therefore have (positive and negative) externalities to the wage of other skill groups. The complexity dispersion parameter measures the percentage compression in log wage differentials per percent accumulation of human capital. Empirical estimates suggest that this parameter is in the range of 2.4 - 3.8. This mechanism explainsfor example the massive compression of wage differentials in some Asian tigersduring the seventies and the eighties. The inverse of the complexity dispersion parameter measures the maximum productivity gain that can be achieved by human capital accumulation.
- Sprache
-
Englisch
- Erschienen in
-
Series: Tinbergen Institute Discussion Paper ; No. 99-049/3
Faktorsubstitution
Lohnstruktur
Theorie
- Handle
- Letzte Aktualisierung
-
20.09.2024, 08:21 MESZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Teulings, Coen N.
- Tinbergen Institute
Entstanden
- 1999
Ähnliche Objekte (12)
Comparative Advantage, Relative Wages, and the Accumulation of Human Capital
Aggregation Bias in Elasticities of Substitution and the Minimum Wage Paradox
Secular Stagnation, Rational Bubbles, and Fiscal Policy
Unemployment and house price crises: Lessons for Fiscal Policy from the Dutch Recession
The Contribution of Minimum Wages to Increasing Wage Inequality
Sorting and the output loss due to search frictions
The option value of vacant land and the optimal timing of city extensions
Rhineland exit?
Education, Growth and Income Inequality
The Right Man for the Job
Urban versus Rural Return to Human Capital in Portugal, A Cook-Book Recipe for Applying Assignment Models
The option value of vacant land: Don't build when demand for housing is booming
Comparative Advantage, Relative Wages, and the Accumulation of Human Capital
Aggregation Bias in Elasticities of Substitution and the Minimum Wage Paradox
Secular Stagnation, Rational Bubbles, and Fiscal Policy
Unemployment and house price crises: Lessons for Fiscal Policy from the Dutch Recession
The Contribution of Minimum Wages to Increasing Wage Inequality
Sorting and the output loss due to search frictions
The option value of vacant land and the optimal timing of city extensions
Rhineland exit?
Education, Growth and Income Inequality
The Right Man for the Job
Urban versus Rural Return to Human Capital in Portugal, A Cook-Book Recipe for Applying Assignment Models
The option value of vacant land: Don't build when demand for housing is booming
Comparative Advantage, Relative Wages, and the Accumulation of Human Capital
Aggregation Bias in Elasticities of Substitution and the Minimum Wage Paradox
Secular Stagnation, Rational Bubbles, and Fiscal Policy
Unemployment and house price crises: Lessons for Fiscal Policy from the Dutch Recession
The Contribution of Minimum Wages to Increasing Wage Inequality
Sorting and the output loss due to search frictions
The option value of vacant land and the optimal timing of city extensions
Rhineland exit?
Education, Growth and Income Inequality
The Right Man for the Job
Urban versus Rural Return to Human Capital in Portugal, A Cook-Book Recipe for Applying Assignment Models