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SOCIAL STRATIFICATION, CAPITAL–SKILL COMPLEMENTARITY, AND THE NONMONOTONIC EVOLUTION OF THE EDUCATION PREMIUM

Published online by Cambridge University Press:  10 June 2004

YISHAY D. MAOZ  and
OMER MOAV
YISHAY D. MAOZ
Affiliation:
University of Haifa
OMER MOAV
Affiliation:
Hebrew University of Jerusalem
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Abstract

This paper presents a model that generates a nonmonotonic evolution of the return to education. The model highlights the role played by socioeconomic stratification in the joint determination of the supply of educated labor and the supply of physical capital. The recent theoretical literature attributes the increased education premium of the last decades to skill-biased technological progress. In contrast, our explanation is based on capital–skill complementarity and endogenous accumulation of physical and human capital in an environment characterized by credit constraints.

Keywords

InequalityGrowthHuman CapitalCapital–Skill ComplementarityStratification
Type
ARTICLES
Information
Macroeconomic Dynamics , Volume 8 , Issue 3 , June 2004 , pp. 295 - 309
Copyright
© 2004 Cambridge University Press

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