The Skill Premium Puzzle in History∗
نویسنده
چکیده
Historically, industrialization has been associated with falling relative returns to skills. This fact is at odds with most theories of industrialization, which tend to imply rising skill premia as natural concomitants to economic growth. This paper develops a simple model of economic demography to help solve this puzzle. Conjecturing that households wished to maximize both their levels of income and the levels of education of their children, the model demonstrates how rising education levels, non-monotonic fertility rates, and falling skill premia can all be explained within one theory. •
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