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Cross-country Disparities in Skill Premium and Skill Acquisition

Banerjee, Anurag; Basu, Parantap; Keller, Elisa

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Authors

Elisa Keller



Abstract

Skilled individuals are rewarded more in poor than in rich countries. Why aren’t more individuals acquiring skills in poor countries? We document that the unemployment rate of the skilled net of that of the unskilled decreases with a country’s level of development. Using a matching model of occupational choice and skill acquisition, we quantify the role of barriers to enter entrepreneurship for these unemployment rates, skill premium and acquisition. The cross-country correlation between skill premium and acquisition decreases by 45% when each country’s gap to the US in the entrepreneurship barrier is decreased enough to even the unemployment differential.

Citation

Banerjee, A., Basu, P., & Keller, E. (2023). Cross-country Disparities in Skill Premium and Skill Acquisition. Economic Inquiry, 61(1), 179-198. https://doi.org/10.1111/ecin.13107

Journal Article Type Article
Acceptance Date Jun 6, 2022
Online Publication Date Jun 29, 2022
Publication Date 2023-01
Deposit Date Jun 7, 2022
Publicly Available Date Mar 28, 2024
Journal Economic Inquiry
Print ISSN 0095-2583
Electronic ISSN 1465-7295
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 61
Issue 1
Pages 179-198
DOI https://doi.org/10.1111/ecin.13107
Public URL https://durham-repository.worktribe.com/output/1203383

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Publisher Licence URL
http://creativecommons.org/licenses/by-nc/4.0/

Copyright Statement
© 2022 The Authors. Economic Inquiry published by Wiley Periodicals LLC on behalf of Western Economic Association International.

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited and is not used for commercial purposes.





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