Central Data Catalog

Citation Information

Type Working Paper
Title Skills Substitutability and Technological Progress: US States 1950-1990
Author(s)
Publication (Day/Month/Year) 2003
URL https://www.econstor.eu/bitstream/10419/76537/1/cesifo_wp1024.pdf
Abstract
In this article we estimate the long-run aggregate elasticity of substitution between skilled and
unskilled workers. This is an important parameter as it allows us to compute the skill biased
technological progress (SBTP) from the evolution of relative wages. However, it is hard to
estimate because skill supply is endogenous. We tackle the task by using instruments
proposed by the labor literature as sources of exogenous variation of schooling achievements
across U.S. States. They are the state laws on Compulsory Schooling Attendance and on
Child Labor. We then calculate SBTP and, using growth accounting, we calculate Hicks
neutral technological progress (HNTP) for U.S. states in each decade between 1950 and 1990.

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