Dalmazzo, Alberto Accetturo, Antonio de Blasio, Guido
Year of Publication:
52nd Congress of the European Regional Science Association: "Regions in Motion - Breaking the Path", 21-25 August 2012, Bratislava, Slovakia
This paper considers the "share-altering" technical change hypothesis in a spatial general equilibrium model where individuals have different levels of skills. Building on a simple Cobb-Douglas production function, our model shows that the implementation of skill-biased technologies requires a sufficient proportion of highly educated individuals. Moreover, when technical progress is such to disproportionately replace middle-skill jobs, the local distribution of skill will exhibit "fat-tails", where the proportion of both highly skilled and low-skilled workers increases. These predictions are consistent with recent existing evidence.