Goldin, C. and Katz, L.F.: The race between education and technology

A data set of comparable estimates of the private rate of return to schooling in the world, 1970–2014

“…This would suggest that the demand for education, especially university-level skilled labor, has increased faster than the supply. The second panel in Table 7 would tend to support the Goldin and Katz (2009) hypothesis that the supply of educated workers has not kept up with technology since 1980.…”

“…This would explain rising returns to schooling in the United States, despite increases in schooling levelswhich would otherwise have depressed returns to schooling (Gunderson and Oreopoulos, 2020) Estimates of the returns to education favoring higher education have more than offset supply changes. This thesis was expertly developed in the work of Goldin and Katz (2009; see also Acemoglu, 2012;Autor et al, 2020). That is, skill-biased technological change has driven the returns to schooling, so that in spite of growing supply of tertiary-educated workers, there is an increase in wage differentials, giving way to increased inequality.…”

Skills and inequality - Introduction and overview

“…This fact has rarely been acknowledged in the more general research literature on skills and inequality. In the economic section of this field, the established practice in empirical analyses has been to infer change in skill demand from change in the skill supply (education) parameter in standard human capital wage equations, with upward (downward) shifts taken to indicate rising (falling) skill demand (Katz and Murphy 1992;Goldin and Katz 2008). This approach of course begs the question of how to properly measure skill at the job level -i.e., measuring skill demand independently from supply -and at any rate takes as axiomatic the orthodox economic model of how supply and demand determine wages in fully competitive markets; with this model, if supply and wages are known, demand can simply be inferred without any need of separate measurement.…”

How important are minimum wage increases in increasing the wages of minimum wage workers?

“…Economists are increasingly debating the relative importance of competitive market forces, employer power, and institutions in wage determination (Card, 2022; Stansbury & Summers, 2019; Strain, 2019). The traditional economic view holds that wage trajectories are a product of market forces (Goldin & Katz, 2010), the accumulation of education and experience (Mincer, 1974), and labor market mobility (Topel & Ward, 1992). Workers' wages rise either because their skills improve or because the dynamics of supply and demand increase the price employers pay for workers who possess those skills.…”