Long-Run Substitutability Between More and Less Educated Workers: Evidence from U.S. States, 19501990

By A. Ciccone, Giovanni Peri. Review of Economics and Statistics, 2004

281 citations recorded by the source corpus.

We estimate the aggregate long-run elasticity of substitution between more educated workers and less educated workers (the slope of the inverse demand curve for more relative to less educated workers) at the U.S. state level. Our data come from the (five) 19501990 decennial censuses. Our empirical approach allows for state and time fixed effects and relies on time- and state-dependent child labor and compulsory school attendance laws as instruments for (endogenous) changes in the relative supply of more educated workers. We find the aggregate long-run elasticity of substitution between more and less educated workers to be around 1.5.

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Citations in the corpus

Human capital in the long run (2016, background): “Micro-evidence analyzing the elasticity of substitution between skilled and unskilled labor suggests the estimate in the range of between 1 and 2 (Ciccone and Peri, 2005; Jones, 2014).”
The interregional migration of human capital and its regional consequences: a review (2017, result): “…determines that skill segregation between high- and low-skilled workers negatively affects low-skill employment growth and that concentration in given skill group negatively affects the employment prospects of that group, a result also found by Ciccone and Peri (2005) for high-skilled workers.”
STEM Workers, H-1B Visas, and Productivity in US Cities (2015, unknown): “31 See Online Appendix for further details on selection criteria.”
Identifying Human Capital Externalities. Theory with Applications (2006, unknown): “Almost all available estimates of the elasticity of substitution between college and high-school workers in the U.S. point to values around 1·5 (e.g. Katz and Murphy, 1992; Ciccone and Peri, 2005).”
Human Capital and Development Accounting: New Evidence from Wage Gains at Migration (2018, background): “A particularly interesting set of these papers studies wage gains in special cases in which immigration slots are granted by lottery, allowing the authors to disentangle selection on gains to migration (see Clemens (2013), Gibson and McKenzie (2012), and especially the shortrun and long-run gains in”
Offshoring and Directed Technical Change (2015, unknown): “Substituting for πh from (14) and using (3), (4), (11), (13) and (22) yields:”
Skill Dispersion and Firm Productivity: An Analysis with Employer‐Employee Matched Data (2006, unknown): “We estimate a generalized constant elasticity of sub- 1 Previous studies using individual worker information at the level of the firm used either a small subsample of the total workforce of each firm (Kramarz, Lollivier, and Pele 1996) or the total workforce of just one firm (Baker, Gibbs, and…”
Migration and trade: Theory with an application to the Eastern–Western European integration (2009, background): “The consensus estimate for this elasticity in the literature is around 1.5 (see Katz and Murphy 1992, and Ciccone and Peri 2005).”