We present a dynamic OLG model of educational signaling and inequality with missing credit markets. Agents are characterized by two sources of unobserved heterogeneity: ability and parental income, consistent with empirical evidence on returns to schooling. Both quantity and quality of human capital evolve endogenously. The model generates a Kuznets inverted-U pattern in skill premia similar to...

This paper analyses the effects of trade liberalisation and technical change on real and relative wages. It builds a model with monopolistic competition, heterogeneous firms and two countries, North and South, and solves it numerically. Skill-biased technical change, caused by decreases in the price of imported equipment as a result of reduced trade costs or falls in its world price, tends to i...

In this paper, I present evidence that the premium for a college education is essentially uncorrelated with the business cycle and that the average hours worked by college graduates are less volatile than those worked by nongraduates. Business cycle theory is then shown to be inconsistent with these observations when endogenous utilization and skill acquisition are incorporated. Abstracting fro...

This paper discusses the relevance of recent research on the economics of human development to the work of the Human Development and Capability Association. The recent economics of human development brings insights about the dynamics of skill accumulation to an otherwise static literature on capabilities. Skills embodied in agents empower people. Enhanced skills enhance opportunities and hence ...

We use a double-calibrated general equilibrium model to decompose the growth of high-skilled wage premium in UK from 1979 2000 into range potential contributory factors. This structural approach ensures that used is consistent with both price and quantity data simultaneously, allows us investigate wide plausible parameter values. find small observed rise skill net outcome set opposing effects, ...

Abstract Using a broad panel of advanced economies, we document that increases in GDP per capita are associated with systematic shift the composition value added to sectors intensive high-skill labour, process label as skill-biased structural change. It follows further development these economies leads an increase relative demand for skilled labour. We develop quantitative two-sector model this...

The Brain Drain: Some Evidence from European Expatriates in the United States This paper uses U.S. Census data from 1990 and 2000 to provide evidence on the labor market characteristics of European-born workers living in the US. It is found that there is a positive wage premium associated with these workers, and that the highly skilled are overrepresented compared with the source country, more ...