A note on the college-premium framework

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2014-4-1

Author

Elitaş, Zeynep

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This paper demonstrates that the estimates produced by the canonical collegepremium 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 that this framework does not offer a systematic way to account for the timeseries 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 the assumptions on the relative supply index

Subject Keywords

College premium equation, Wage inequality, Relative supply, Skill biased technological change (SBTC)

URI

http://www2.feas.metu.edu.tr/metusd/ojs/index.php/metusd/article/view/713
https://hdl.handle.net/11511/58317

Journal

METU Studies in Development

Collections

Department of Economics, Article

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Citation Formats

Z. Elitaş, “A note on the college-premium framework,” METU Studies in Development, vol. 41, no. 1, pp. 43–52, 2014, Accessed: 00, 2020. [Online]. Available: http://www2.feas.metu.edu.tr/metusd/ojs/index.php/metusd/article/view/713.