Skill Polarization in Local Labor Markets Under Share‐Altering Technical Change

24 Pages Posted: 4 Mar 2014

See all articles by Antonio Accetturo

Antonio Accetturo

Bank of Italy

Alberto Dalmazzo

University of Siena - Department of Economics

Guido de Blasio

Bank of Italy

Date Written: March 2014

Abstract

This paper considers the “share‐altering” technical change hypothesis in a spatial general equilibrium model where individuals have different levels of skills. Building on a simple Cobb‐Douglas production function, our model shows that the implementation of skill‐biased technologies requires a sufficient proportion of highly educated individuals. Moreover, when technical progress disproportionately replaces middle‐skill jobs, the local distribution of skills will exhibit “fat‐tails,” where the proportion of both highly skilled and low‐skilled workers increases. These and several other predictions of the model are consistent with recent existing evidence, and avoid some major criticism against the “canonical” CES framework.

Suggested Citation

Accetturo, Antonio and Dalmazzo, Alberto and de Blasio, Guido, Skill Polarization in Local Labor Markets Under Share‐Altering Technical Change (March 2014). Journal of Regional Science, Vol. 54, Issue 2, pp. 249-272, 2014, Available at SSRN: https://ssrn.com/abstract=2404137 or http://dx.doi.org/10.1111/jors.12073

Antonio Accetturo (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Alberto Dalmazzo

University of Siena - Department of Economics ( email )

Piazza S. Francesco, 7
Siena, I-53100
Italy
+39 0577 232 697 (Phone)

Guido De Blasio

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy

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