Skilled Tradable Services: The Transformation of U.S. High-Skill Labor Markets

52 Pages Posted: 23 Aug 2019

See all articles by Fabian Eckert

Fabian Eckert

Princeton University - International Economics Section

Sharat Ganapati

Georgetown University

Conor Walsh

Yale University

Date Written: August 18, 2019

Abstract

We study a group of service industries that is skill-intensive, widely traded, and has recently seen explosive wage growth. Between 1980 and 2015, these "Skilled Tradable Services" accounted for a sharply increasing share of employment among the highest-earning Americans. Unlike any other sector, their wage growth was strongly biased towards the densest local labor markets and the highest paying firms. These services alone explain 30% of the increase in inequality between the 50th and 90th percentiles of the wage distribution. We offer an explanation for these patterns that highlights the complementarity between the non-rivalry of knowledge and changes in communication costs.

Keywords: Wage Inequality, Skill Biased, Technological Change, Urban Growth, Trade and Geography

JEL Classification: J31, O33, R11, R12

Suggested Citation

Eckert, Fabian and Ganapati, Sharat and Walsh, Conor, Skilled Tradable Services: The Transformation of U.S. High-Skill Labor Markets (August 18, 2019). Available at SSRN: https://ssrn.com/abstract=3439118 or http://dx.doi.org/10.2139/ssrn.3439118

Fabian Eckert

Princeton University - International Economics Section ( email )

Princeton, NJ 08544-1021
United States

Sharat Ganapati (Contact Author)

Georgetown University ( email )

Washington, DC 20057
United States

Conor Walsh

Yale University ( email )

Warner House
1 Hillhouse Avenue
New Haven, CT 06511
United States

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