Wage risk and the skill premium

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• dc.contributor.author Slavík, Ctiradca
• dc.contributor.author Yazici, Hakkica
• dc.date.accessioned 2018-04-26T09:02:21Z
• dc.date.available 2018-04-26T09:02:21Z
• dc.date.issued 2018-03
• dc.description.abstract The skill premium has increased significantly in the United States in the last five decades. During the same period, individual wage risk has also increased. This paper proposes a mechanism through which a rise in wage risk increases the skill premium. Intuitively, a rise in uninsured wage risk increases precautionary savings, thereby boosting capital accumulation, which increases the skill premium due to capital-skill complementarity. Using a quantitative macroeconomic model, we find that the rise in wage risk observed between 1967 and 2010 increases the skill premium significantly. This finding is robust across a variety of model specifications.ca
• dc.description.sponsorship The ADEMU Working Paper Series is being supported by the European Commission Horizon 2020 European Union funding for Research & Innovation, grant agreement No 649396.
• dc.format.mimetype application/pdfca
• dc.identifier.uri http://hdl.handle.net/10230/34479
• dc.language.iso engca
• dc.relation.ispartofseries ADEMU Working Paper Series;88
• dc.relation.projectID info:eu-repo/grantAgreement/EC/H2020/649396
• dc.rights This is an Open Access article distributed under the terms of the Creative Commons Attribution License Creative Commons Attribution 4.0 International, which permits unrestricted use, distribution and reproduction in any medium provided that the original work is properlyattributed.ca
• dc.rights.accessRights info:eu-repo/semantics/openAccessca
• dc.rights.uri https://creativecommons.org/licenses/by/4.0/ca
• dc.subject.keyword Skill premiumen
• dc.subject.keyword Wage risken
• dc.subject.keyword Capital-skill complementarityen
• dc.subject.keyword Precautionary savingsen
• dc.title Wage risk and the skill premiumca
• dc.type info:eu-repo/semantics/workingPaperca