Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/85945
Authors: 
Teulings, Coen N.
Year of Publication: 
2002
Series/Report no.: 
Tinbergen Institute Discussion Paper 02-081/3
Abstract: 
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.
Subjects: 
assignment
wage distribution
human capital.
JEL: 
D30
J24
Document Type: 
Working Paper

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