— Mexico’s college premium rose in the 1990s. Studies employing structural decomposition analyses treat the college premium as the relative price of “skilled” to “unskilled” workers. They find that reallocations of labor across industries and occupations cannot account for rising college premiums, and often attribute them to widely observed trade-induced increases in skills demand within the ma...

An intricate dynamic pattern has been commonly observed in many developed countries during the past decades. This pattern contains a simultaneous rise in the following economic variables: (i) education premium, (ii) educated labor supply, (iii) total factor productivity, (iv) labor productivity, and (v) income inequality. Typical explanations for the different elements of this pattern assume a ...

Under plausible assumptions about preferences and technology, the model in this paper suggests that the entire volume of world trade matters for wage inequality. Therefore, trade integration, even among identical countries, is likely to increase the skill premium. Further, we argue that empirical evidence of a falling relative price of skill-intensive goods can be reconciled with the fast growt...

Time pressure on trainees and supervisors alike places a premium on efficiency in training students to master clinical skills. Through role-playing, a supervisor can create multiple iterations of the desired skill until competence is obtained. The skill training can be advanced in intensity and complexity until the trainer and trainee are confident that the interviewing skill is accessible on d...

Recent evidence shows that the returns to labor and the skill premium both increase in developing countries after trade liberalization, despite the low skill content of their exports. The author explains this apparent puzzle by arguing that trade increases technology transfers from industrial to developing countries and that the transfer technology is biased in favor of skilled labor. The relat...

India’s Increasing Skill Premium: Role of Demand and Supply The tertiary-secondary (college-high school) wage premium has been increasing in India over the past decade, but the increase differs across age groups. The increase in wage premium has been driven mostly by younger age groups, while older age groups have not experienced any significant increase. This paper uses the demand and supply m...

We document three striking facts that pertain to the impact of globalization on wage inequality in China: (a) the college wage premium in manufacturing stayed flat before China’s accession into the WTO in 2001, but rose dramatically thereafter; (b) since the accession, the growth in processing exports of foreign-owned firms has far surpassed the growth of joint ventures and Chinese-owned firms;...

We document that the wage distribution in larger and more productive cities nearly everywhere first-order stochastically dominates that in less productive cities. This confirms earlier evidence on the city size–wage premium. Yet, because this premium reflects higher house prices, this does not necessarily imply that this stochastic dominance relation also exists in the distribution of skills. W...