A note on the college-premium framework

Date

2014-4

Author

Elitaş, Zeynep

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This paper demonstrates that the estimates produced by the canonical college- premium framework are nonnegligibly sensitive to the assumptions on the relative supply index, the key object in the analysis of the college premium. In particular , we argue t h a t this fr a me wo r k does not offer a systematic way to account for the time - series evolution of the efficiency units of labor supply. This fragility is a source of empirical non-robustness and has important implications for the analysis of wage inequality. We show how the main predictions of the standard model change upon relaxing th e assumptions on the relative supply index.

Subject Keywords

College premium equation, Wage inequality, Relative supply, Skill biased technological change (SBTC), Ücret eşitsizliği, Göreli arz, Beceri yanlı teknolojik gelişme

URI

https://hdl.handle.net/11511/111325
http://www2.feas.metu.edu.tr/metusd/ojs/index.php/metusd/article/view/713

Collections

Department of Economics, Article