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How the wage-education profile got more convex: evidence from Mexico

How the wage-education profile got more convex: evidence from Mexico
How the wage-education profile got more convex: evidence from Mexico
In the 1990s, in many countries, wages became a more convex function of education: returns to college increased and returns to intermediate education declined. This paper argues that an important cause of this convexification was an exogenous increase in the demand for skilled labour: the increased demand stimulated a supply response, and the supply of intermediate-educated workers further increased the demand for college-educated workers because these two types of labour are complementary. This argument is supported by an empirical equilibrium model of savings and educational choices for Mexico, where the degree of convexification was amplified by loosening credit constraints.
1935-1690
Binelli, Chiara
9c592dc3-5794-423c-8532-c0f82a1c3639
Binelli, Chiara
9c592dc3-5794-423c-8532-c0f82a1c3639

Binelli, Chiara (2015) How the wage-education profile got more convex: evidence from Mexico. B.E. Journal of Macroeconomics. (doi:10.1515/bejm-2014-0030). (Submitted)

Record type: Article

Abstract

In the 1990s, in many countries, wages became a more convex function of education: returns to college increased and returns to intermediate education declined. This paper argues that an important cause of this convexification was an exogenous increase in the demand for skilled labour: the increased demand stimulated a supply response, and the supply of intermediate-educated workers further increased the demand for college-educated workers because these two types of labour are complementary. This argument is supported by an empirical equilibrium model of savings and educational choices for Mexico, where the degree of convexification was amplified by loosening credit constraints.

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Submitted date: 2015
Organisations: Economics

Identifiers

Local EPrints ID: 377961
URI: https://eprints.soton.ac.uk/id/eprint/377961
ISSN: 1935-1690
PURE UUID: fbc787e7-0f52-4991-95f3-460937aa2540

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Date deposited: 23 Jun 2015 13:49
Last modified: 15 Jul 2019 21:16

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