Per capita income and the demand for skills.

Autor/inn/en	Caron, Justin; Fally, Thibault; Markusen, James
Institution	CESifo GmbH
Titel	Per capita income and the demand for skills. Gefälligkeitsübersetzung: Pro-Kopf-Einkommen und Qualifikationsbedarf.
Quelle	München (2017), 19 S. PDF als Volltext kostenfreie Datei Link als defekt meldenVerfügbarkeit
Reihe	CESifo working paper. 6514
Sprache	englisch
Dokumenttyp	online; Monographie
ISSN	2364-1428
Schlagwörter	Bildungsertrag; Außenhandel; Konsum; Volkseinkommen; Arbeitskräftebedarf; Qualifikationsanforderung; Qualifikationsstruktur; Liberalisierung; Welt
Abstract	"Almost all of the literature about the growth of income inequality and the relationship between skilled and unskilled wages approaches the issue from the production side of general equilibrium (skill-biased technical change, international trade). Here, we add a role for income dependent demand interacted with factor intensities in production. We explore how income growth and trade liberalization influence the demand for skilled labor when preferences are nonhomothetic and income-elastic goods are more intensive in skilled labor, an empirical regularity documented in Caron, Fally and Markusen (2014). In one experiment, counterfactual simulations show that sector neutral productivity growth, which generates shifts in consumption towards skill-intensive goods, leads to significant increases in the skill premium: in developing countries, a one percent increase in productivity leads to a 0.1 to 0.25 percent increase in the skill premium. In several countries, including China and India, simulations suggest that the historical growth experienced in the last 25 years may have led to an increase in the skill premium of more than 10%. In a second experiment, we show that trade cost reductions generate quantitatively very different outcomes once we account for non-homothetic preferences. These imply substantially less predicted net factor content of trade and allow for a shift in consumption patterns caused by trade-induced income growth. Overall, the negative effect of trade cost reductions on the skill premium predicted for developing countries under homothetic preferences (Stolper-Samuelson) is strongly mitigated, and sometimes reversed." (Author's abstract, IAB-Doku).
Erfasst von	Institut für Arbeitsmarkt- und Berufsforschung, Nürnberg
Update	2017/4