Comparative Advantage, Learning, and Sectoral Wage Determination

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Comparative Advantage, Learning, and Sectoral Wage Determination

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Title: Comparative Advantage, Learning, and Sectoral Wage Determination
Author: Katz, Lawrence; Gibbons, Robert; Lemieux, Thomas; Parent, Daniel

Note: Order does not necessarily reflect citation order of authors.

Citation: Gibbons, Robert, Lawrence F. Katz, Thomas Lemieux, and Daniel Parent. 2005. Comparative advantage, learning, and sectoral wage determination. 2005. Journal of Labor Economics 23(4): 681-724.
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Abstract: We develop a model in which a worker’s skills determine the worker’s current wage and sector. The market and the worker are initially uncertain about some of the worker’s skills. Endogenous wage changes and sector mobility occur as labor market participants learn about these unobserved skills. We show how the model can be estimated using nonlinear instrumental variables techniques. We apply our methodology to study wages and allocation of workers across occupations and industries using individual‐level panel data from the National Longitudinal Survey of Youth. We find that high‐wage sectors employ high‐skill workers and offer high returns to workers’ skills.
Published Version: http://dx.doi.org/10.1086/491606
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:2766651

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  • FAS Scholarly Articles [7103]
    Peer reviewed scholarly articles from the Faculty of Arts and Sciences of Harvard University
 
 

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