O'Reilly logo

HANDBOOK OF LABOR ECONOMICS, VOL 4B by David Card, Orley Ashenfelter

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

3.6. Summary

To recap, the canonical model provides a parsimonious framework for thinking about the skill premium and the determinants of the earnings distribution. Its simplicity leads to several sharp results, including:

1. Changes in the wage structure are linked to changes in factor-augmenting technologies and relative supplies.

2. Overall inequality rises in tandem with the skill premium (as within group inequality is either invariant when the skill premium changes or co-moves with the skill premium).

3. The economy-wide average wage and the real wage of each skill group should increase over time as a result of technological progress, particularly if the supply of high skill labor is increasing.61

4. The rate and direction of technological ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required