Wages, Human Capital, and Structural Transformation

Arbeitspapier

Average wages are considerably lower in agriculture than in the other sectors. We document this fact for thirteen countries ranging from rich (Canada, U.S.) to poor (India, Indonesia). We develop a measure of human capital that accounts for the selection of workers with different unobserved skills into sectors. We find that differences in human capital account for most of the wage gaps. We develop a model that rationalizes this finding and that allows us to quantify the distortions to the allocation of labor. We find that they are considerably smaller than typically claimed in the literature.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 6426

Classification and Topics

• Classification: Wirtschaft ; Economic Development: General
• Subject: human capital gaps ; misallocation of labor ; wage gaps

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Herrendorf, Berthold ; Schoellman, Todd
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/161865
• Last update: 10.03.2025, 11:44 AM CET