English, Article, Journal or magazine article edition: Costly Investment, Complementarities and the Skill Premium Óscar Afonso; Maria Thompson

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Bookmark: http://trove.nla.gov.au/version/182346
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Costly Investment, Complementarities and the Skill Premium
Author
  • Óscar Afonso
  • Maria Thompson
Physical Description
  • preprint
Notes
  • We propose a new framework to analyse the wage premium behaviour. Building on Acemoglu and Zilibotti (2001), we introduce physical capital and two assumptions: (i) internal costly investment in both capital and R&​D; (ii) complementarities between capital goods in production. We find that, for economies relatively abundant in high-skilled labour, a rise in the relative endowment of high-skilled labour is accompanied by a rise in the skill premium. We further find that a rise (i) in investment costs or (ii) in the complementarities degree, requires an increase in the relative endowment of high-skilled labour, for the economy to remain in the same growth equilibrium. For economies relatively abundant in high-skilled labour, such rises are also accompanied by an increase in the skill premium.
  • R&​D, Technological-Knowledge Bias, Wage Inequality, Complementarities, Costly Investment
  • RePEc:por:fepwps:323
Language
  • English
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