Data: |
2018 |
Resum: |
The skill premium has increased significantly in the United States in the last five decades. During the same period, individual wage risk has also increased. This paper proposes a mechanism through which a rise in wage risk increases the skill premium. Intuitively, a rise in uninsured wage risk increases precautionary savings, thereby boosting capital accumulation, which increases the skill premium due to capital-skill complementarity. Using a quantitative macroeconomic model, we find that the rise in wage risk observed between 1967 and 2010 increases the skill premium significantly. This finding is robust across a variety of model specifications. |
Resum: |
The ADEMU Working Paper Series is being supported by the European Commission Horizon 2020 European Union funding for Research & Innovation, grant agreement No 649396. |
Ajuts: |
European Commission 649396
|
Drets: |
Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial, la distribució, la comunicació pública de l'obra i la creació d'obres derivades, fins i tot amb finalitats comercials, sempre i quan es reconegui l'autoria de l'obra original. |
Llengua: |
Anglès |
Col·lecció: |
Barcelona Graduate School of Economics. ADEMU working paper series |
Col·lecció: |
ADEMU Working Paper Series ; 88 |
Document: |
Working paper |
Matèria: |
Skill premium ;
Wage risk ;
Capital-skill complementarity ;
Precautionary savings |