Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/202529
Authors: 
Brezis, Elise S.
Brand, Gilad
Year of Publication: 
2017
Series/Report no.: 
Working Paper No. 2017-10
Abstract: 
Over the last decades, productivity in the tradable sector rose substantially, while in the non-tradable sector, output per worker has remained the same, despite a similar increase in human capital in both sectors. This paper emphasizes that duality in higher education as well as heterogeneous ability of individuals can explain the differences in labor productivity between tradable and non-tradable industries. The duality in the higher-education sector enables a separation of individuals by their ability, and in consequence, human capital in both industries is different. The heterogeneity in human capital can explain that despite an increase in human capital in both sectors, there is still a gap in productivity. In other words, the productivity gap between tradable and non-tradable sectors is fueled by the duality in higher education, leading to heterogeneity in human capital. In consequence, there is a contrast between on one hand, more mobility across countries, and on the other hand, less mobility between sectors.
Subjects: 
ability
skills
productivity
tradable goods
services
duality
higher education
human capital
wage premium
JEL: 
F12
F16
F66
I26
J24
O14
Document Type: 
Working Paper

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