The Returns to Skill
نویسندگان
چکیده
Since 1975, an increase in the return to years of schooling, in the percentage of the labor force that is skilled, and in the variance of wage income within skill categories have characterized the U.S. labor market. While the first two facts point towards an increase in the demand for skilled labor, the third fact establishes that this increase in demand has not been uniform for all members of a particular skill category. Hence, the three stylized facts point toward unobserved skill heterogeneity within education classes. In this paper, we argue that education per se does not measure skill adequately, and we suggest an alternative measure based on the observed skill characteristics of the job. We analyze the return to various dimensions of skill, including formal education. After accounting for other elements of skill, we find that the return to education has been constant since 1970. Moreover, variations in direct measures of skill, such as mathematical ability or eye-hand coordination, account for a significant fraction of the increased dispersion in income for those with a college degree. Surprisingly, we show that the group who has fared worst in the labor market in the past several decades are those who are educated but unskilled.
منابع مشابه
North-South Trade Liberalization and Returns to Skill in the South: The Case of Mexico
North-South Trade Liberalization and Returns to Skill in the South: The Case of Mexico This study examines the effect of NAFTA, an instance of North-South trade liberalization, on returns to skill in Mexico. Mexico is abundant in low-skill workers relative to the US and Canada, and so, by the Hecksher-Ohlin-Samuelson trade model, NAFTA ought to have raised the relative earnings of low-skill wor...
متن کاملAre There Increasing Returns to Local Concentration of Skills? Evidence on Wages and Returns to Education in Transition
In this paper I use extensive spatial variation in end-of-communism local skill endowment to test for the presence of human capital spillovers and to understand the regional variation in returns to education in a transition country — the Czech Republic. The evidence is consistent with a tendency of skill-intensive production to locate in areas relatively abundant in skills, but I find no eviden...
متن کاملFactor Endowments and the Returns to Skill: New Evidence from the American Past
The existing theory of skill-biased technical change predicts that heterogeneity in factor endowments will affect technological adoption and the returns to skill. This paper considers the relationship between the marked heterogeneity in factor endowments and the returns to skill in early twentieth century America. Using a variety of historical sources, we document the heterogeneous technology l...
متن کاملThe Returns to Skill and Racial Difference in Parenting: Evidence from the Civil Rights Movement
On average, the parental practices adopted by African American parents of young children are much less cognitively stimulating than those of their white counterparts. This paper argues that these differences stem from the low rates of return to human capital historically experienced by African Americans. To study the relationship between the race-specific returns to skill and parenting, I use i...
متن کاملThe Returns to Skill and Racial Differences in Parenting: Evidence from the Civil Rights Movement
On average, the parental practices adopted by African American parents of young children are much less cognitively stimulating than those of their white counterparts. This paper argues that these differences stem from the low rates of return to human capital historically experienced by African Americans. To study the relationship between the race-specific returns to skill and parenting, I use i...
متن کاملMeasuring Institutional Investors’ Skill from Their Investments in Private Equity
Using a large sample of institutional investors’ private equity investments in venture and buyout funds, we estimate the extent to which investors’ skill affects returns from private equity investments. We first consider whether investors have differential skill by comparing the distribution of investors’ returns relative to the bootstrapped distribution that would occur if funds were randomly ...
متن کامل