Skill-Biased Structural Change

By Francisco J. Buera, Joseph P. Kaboski, Richard Rogerson. The Review of Economic Studies, 2021

129 citations recorded by the source corpus.

Using a broad panel of advanced economies, we document that increases in GDP per capita are associated with a systematic shift in the composition of value added to sectors that are intensive in high-skill labour, a process we label as skill-biased structural change. It follows that further development in these economies leads to an increase in the relative demand for skilled labour. We develop a quantitative two-sector model of this process as a laboratory to assess the sources of the rise of the skill premium in the U.S. and a set of ten other advanced economies, over the period 1977 to 2005. For the U.S., we find that the sector-specific skill neutral component of technical change accounts for 18–24% of the overall increase of the skill premium due to technical change, and that the mechanism through which this component of technical change affects the skill premium is via skill-biased structural change.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/87026e76c69a85e208ca11d60e2c007788b0e243

Citations in the corpus

• Tasks, Automation, and the Rise in US Wage Inequality (2021, unknown): “Following Buera, Kaboski, and Rogerson (2015), we set the elasticity of substitution between industries to η= 0 2.”
• Structural Change With Long‐Run Income and Price Effects (2015, unknown): “To do this, we follow Buera et al. (2015) and assign each consumption expenditure category to an industry of the U.”