Social Stratification, Capital-Skill Complementarity and the Non-Monotonic Evolution of the Education Premium

Posted: 6 Jul 2004

See all articles by Yishay Maoz

Yishay Maoz

The Open University of Israel - Department of Management and Economics

Omer Moav

University of Warwick - Department of Economics; Centre for Economic Policy Research (CEPR)

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Abstract

This paper presents a model that generates a non-monotonic evolution of the return to education. The model highlights the role played by socioeconomic stratification in the joint determination of the supply of educated labor and the supply of physical capital. The recent theoretical literature attributes the increased education premium of the last decades to skill-biased technological progress. In contrast, our explanation is based on capital-skill complementarity and endogenous accumulation of physical and human capital in an environment characterized by credit constraints.

Keywords: Inequality, Growth, Human Capital, Capital-Skill Complementarity, Stratification

JEL Classification: D31, J31, O11, O40

Suggested Citation

Maoz, Yishay and Moav, Omer, Social Stratification, Capital-Skill Complementarity and the Non-Monotonic Evolution of the Education Premium. Macroeconomic Dynamics, Vol. 8, pp. 295-309, June 2004. Available at SSRN: https://ssrn.com/abstract=561521

Yishay Maoz (Contact Author)

The Open University of Israel - Department of Management and Economics ( email )

1 University Road
Raanana, 43107
Israel
9727781891 (Phone)
97297780668 (Fax)

HOME PAGE: http://www.openu.ac.il/Personal_sites/Yishay-Maoz.html

Omer Moav

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom

HOME PAGE: http://www2.warwick.ac.uk/fac/soc/economics/staff/academic/moav

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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