I am a macroeconomist with interests in Economic Growth and Labour Economics. My research focuses on two issues of the labour market: the effects of technological change on the skill premium and inequality; the effects of the structure of the higher education system on productivity and inequality.
Inequality, Technological Change, and the Dynamics of the Skill Premium
(Job Market Paper)
In this paper, , I study different types of technological changes as explanations for the U-shape evolution of the skill premium observed in the U.S., during the 20th century.
This paper studies two channels through which technological change could affect the skill premium. Technological change, be it skill-biased or unskill-biased, affects the skill premium directly by affecting the demand for skilled and unskilled labour. Moreover, the distribution of income affects future cohort's supply of skilled and unskilled labour. Therefore, technological change can also affect the skill premium indirectly in the long-run, since it affects market wages and the transition of the distribution of income.
The unskill-biased technological change which occurred at the beginning of the 20th century caused the decline in the skill premium during the first half of the last century. The sustained skill-biased technological change has kept increasing the skill premium since the midpoint of last century. This paper, however predicts that, in the long-run, skill-biased technological change has an indirectly dampening effect on the skill premium, which implies that skill-biased technological change could generate a Kuznets curve of the skill premium.
The Patterns of the Skill Premium: Simulation of the U.S. Economy
Following the dynamic model built in Chapter 1, I conduct quantitative experimental studies to analyze how the skill premium is determined in an economy. The model is parameterized to the U.S. as the benchmark economy. Experiments demonstrate that having different accesses to technology is an important explanation for the differences in the skill premium across countries. In order to offer some policy suggestions to reduce inequality, the paper also tests both the short-run and long-run effects of exogenous shocks on the skill premium. The result implies that the long-run effects of exogenous shocks depend on the scale of the shocks, which, in turn, means that if a shock is not large enough, its long-run effect on the skill premium and inequality will not be significant since it could be digested by the transition of the distribution of wealth.
The Structure of the Higher Education System, Productivity and Inequality
In the third chapter, I introduce the higher education system into a growth model and analyze the bilateral feedback between socioeconomic composition and the structure of the higher education system and the effects of that structure on productivity and inequality. The structure of the higher education system differs across countries. In some countries for example, in Germany higher education is provided by institutions with very small variance in the quality. This is referred to as the “unified” system. In some other countries, however for example, the U.S. the higher education system consists of a mix of institutions that differ in prestige, quality, and selectivity of students, and is referred to as the “diversified” system.
The results of this paper indicate that an economy with a larger population, a larger proportion of high-ability agents, and a higher return to high tier education tends to have a diversified system. Compared with the unified system, the diversified system can add more productivity on high-ability agents and reduce the number of uneducated high-ability agents, thereby increasing the aggregate productivity. Furthermore, even though the diversified system increases the Gini coefficient, it is, nevertheless, a Pareto improvement. Moreover, transforming into a diversified higher education system could eliminate poverty trap and reduce inequality in the long-run.
Inequality, Technological Change, and the Dynamics of the Skill Premium
(Job Market Paper)
In this paper, , I study different types of technological changes as explanations for the U-shape evolution of the skill premium observed in the U.S., during the 20th century.
This paper studies two channels through which technological change could affect the skill premium. Technological change, be it skill-biased or unskill-biased, affects the skill premium directly by affecting the demand for skilled and unskilled labour. Moreover, the distribution of income affects future cohort's supply of skilled and unskilled labour. Therefore, technological change can also affect the skill premium indirectly in the long-run, since it affects market wages and the transition of the distribution of income.
The unskill-biased technological change which occurred at the beginning of the 20th century caused the decline in the skill premium during the first half of the last century. The sustained skill-biased technological change has kept increasing the skill premium since the midpoint of last century. This paper, however predicts that, in the long-run, skill-biased technological change has an indirectly dampening effect on the skill premium, which implies that skill-biased technological change could generate a Kuznets curve of the skill premium.
The Patterns of the Skill Premium: Simulation of the U.S. Economy
Following the dynamic model built in Chapter 1, I conduct quantitative experimental studies to analyze how the skill premium is determined in an economy. The model is parameterized to the U.S. as the benchmark economy. Experiments demonstrate that having different accesses to technology is an important explanation for the differences in the skill premium across countries. In order to offer some policy suggestions to reduce inequality, the paper also tests both the short-run and long-run effects of exogenous shocks on the skill premium. The result implies that the long-run effects of exogenous shocks depend on the scale of the shocks, which, in turn, means that if a shock is not large enough, its long-run effect on the skill premium and inequality will not be significant since it could be digested by the transition of the distribution of wealth.
The Structure of the Higher Education System, Productivity and Inequality
In the third chapter, I introduce the higher education system into a growth model and analyze the bilateral feedback between socioeconomic composition and the structure of the higher education system and the effects of that structure on productivity and inequality. The structure of the higher education system differs across countries. In some countries for example, in Germany higher education is provided by institutions with very small variance in the quality. This is referred to as the “unified” system. In some other countries, however for example, the U.S. the higher education system consists of a mix of institutions that differ in prestige, quality, and selectivity of students, and is referred to as the “diversified” system.
The results of this paper indicate that an economy with a larger population, a larger proportion of high-ability agents, and a higher return to high tier education tends to have a diversified system. Compared with the unified system, the diversified system can add more productivity on high-ability agents and reduce the number of uneducated high-ability agents, thereby increasing the aggregate productivity. Furthermore, even though the diversified system increases the Gini coefficient, it is, nevertheless, a Pareto improvement. Moreover, transforming into a diversified higher education system could eliminate poverty trap and reduce inequality in the long-run.