TY - JOUR
T1 - Changes in between-group inequality
T2 - Computers, occupations, and international trade
AU - Burstein, Ariel
AU - Morales, Eduardo
AU - Vogel, Jonathan
N1 - Publisher Copyright:
© 2019 American Economic Journal: Macroeconomics.
PY - 2019
Y1 - 2019
N2 - We provide a unifying framework to quantify the impact of several determinants of changes in US between-group inequality. We use an assignment framework with many labor groups, equipment types, and occupations in which changes in inequality are driven by changes in workforce composition, occupation demand, computerization, and labor productivity. We parameterize the model using direct measures of computer usage within labor group-occupation pairs and quantify the impact of each shock for various dimensions of between-group inequality between 1984 and 2003. We find, for example, that computerization and shifts in occupation demand jointly account for roughly 80 percent of the rise in the skill premium, with computerization alone accounting for roughly 60 percent. In an open-economy extension of the model, we show how computerization and changes in occupation demand can be caused by changes in the extent of international trade and perform counterfactual exercises to quantify these effects.
AB - We provide a unifying framework to quantify the impact of several determinants of changes in US between-group inequality. We use an assignment framework with many labor groups, equipment types, and occupations in which changes in inequality are driven by changes in workforce composition, occupation demand, computerization, and labor productivity. We parameterize the model using direct measures of computer usage within labor group-occupation pairs and quantify the impact of each shock for various dimensions of between-group inequality between 1984 and 2003. We find, for example, that computerization and shifts in occupation demand jointly account for roughly 80 percent of the rise in the skill premium, with computerization alone accounting for roughly 60 percent. In an open-economy extension of the model, we show how computerization and changes in occupation demand can be caused by changes in the extent of international trade and perform counterfactual exercises to quantify these effects.
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U2 - 10.1257/mac.20170291
DO - 10.1257/mac.20170291
M3 - Article
AN - SCOPUS:85065905208
SN - 1945-7707
VL - 11
SP - 348
EP - 400
JO - American Economic Journal: Macroeconomics
JF - American Economic Journal: Macroeconomics
IS - 2
ER -