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Citation Information

Type Journal Article - Review of Economics and Statistics
Title Long-run substitutability between more and less educated workers: evidence from US states, 1950-1990
Author(s)
Volume 87
Issue 4
Publication (Day/Month/Year) 2005
Page numbers 652-663
URL http://repositori.upf.edu/bitstream/handle/10230/1238/764.pdf?sequence=1
Abstract
We estimate the aggregate long-run elasticity
of substitution between more and less educated
workers (the slope of the demand curve for
more relative to less educated workers) at the
US state level. Our data come from the (five)
1950-1990 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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