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ERIC Number: EJ697073
Record Type: Journal
Publication Date: 2005-Apr-1
Pages: 37
Abstractor: Author
ISBN: N/A
ISSN: ISSN-0022-3808
EISSN: N/A
Comparative Advantage, Relative Wages, and the Accumulation of Human Capital.
Teulings, Coen N.
Journal of Political Economy, v113 n2 p425 Apr 2005
I apply Ricardo's principle of comparative advantage to a theory of factor substitutability in a model with a continuum of worker and job types. Highly skilled workers have a comparative advantage in complex jobs. The model satisfies the distance-dependent elasticity of substitution (DIDES) characteristic: substitutability between types declines with their skill distance. I analyze changes in relative wages due to human capital accumulation. The concept of a complexity dispersion parameter or compression elasticity is introduced. Empirical studies suggest its value to be equal to two: a 1 percent increase in the stock of human capital reduces the Mincerian return by 2 percent.
University of Chicago Press, Journals Division, P.O. Box 37005, Chicago, IL 60637. Tel: 773-753-3347; Web site: http://www.journal.uchicago.edu; e-mail: subscriptions@press.uchicago.edu
Publication Type: Journal Articles
Education Level: N/A
Audience: N/A
Language: N/A
Sponsor: N/A
Authoring Institution: N/A
Grant or Contract Numbers: N/A