University of Surrey

Test tubes in the lab Research in the ATI Dance Research

Aggregation, the Skill Premium and the Two-Level Production Function

McAdam, Peter, León-Ledesma, M and Willman, A (2012) Aggregation, the Skill Premium and the Two-Level Production Function Frontiers of Economics and Globalization, Volume . Emerald. ISBN 978-1-78052-396-5

[img]
Preview
Text (licence)
SRI_deposit_agreement.pdf

Download (33kB)

Abstract

We examine the two-level nested Constant Elasticity of Substitution production function where both capital and labor are disaggregated in two classes. We propose a normalized system estimation method to retrieve estimates of the inter- and intra-class elasticities of substitution and factor augmenting technical progress coefficients. The system is estimated for US data for the 1963-2006 period. Our findings reveal that skilled and unskilled labor classes are gross substitutes, capital structures and equipment are gross complements, and aggregate capital and aggregate labor are gross complements with an elasticity of substitution close to 0.5. We discuss the implications of our findings and methodology for the analysis of the causes of the increase in the skill premium and, by implication, inequality in a growing economy.

Item Type: Book
Divisions : Faculty of Arts and Social Sciences > School of Economics
Authors :
NameEmailORCID
McAdam, PeterP.Mcadam@surrey.ac.ukUNSPECIFIED
León-Ledesma, MUNSPECIFIEDUNSPECIFIED
Willman, AUNSPECIFIEDUNSPECIFIED
Date : 1 January 2012
Copyright Disclaimer : Copyright 2012 Emerald Publishing Group
Uncontrolled Keywords : Two-level CES production function, factor-augmenting technical progress, factor substitution, aggregation, skill-premium
Depositing User : Symplectic Elements
Date Deposited : 28 Mar 2017 15:26
Last Modified : 04 Oct 2017 13:50
URI: http://epubs.surrey.ac.uk/id/eprint/658129

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year


Information about this web site

© The University of Surrey, Guildford, Surrey, GU2 7XH, United Kingdom.
+44 (0)1483 300800