Richard Rogerson is a Professor of Economics and Public Affairs at Princeton University, a Research Associate at the National Bureau of Economic Research, and a fellow of the Econometric Society. His teaching and research interests are in the fields of macroeconomics and labor economics. More »
Abstract: We document for a broad panel of advanced economies that increases in GDP per capita are associated with a shift in the composition of value added to sectors that are intensive in high-skill labor. It follows that further development in these economies leads to an increase in the relative demand for skilled labor. We develop a two-sector model of this process and use it to assess the contribution of this process of skill-biased structural change to the rise of the skill premium in the US over the period 1977 to 2005. We find that these compositional demands account for between 25 and 30% of the overall increase of the skill premium due to technical change.
Last Updated: Apr 03, 2015