Skill composition: exploring a wage-based skill measure
Working paper
View/ Open
Date
2008Metadata
Show full item recordCollections
- Discussion Papers [1002]
Abstract
Most studies of heterogeneous labor inputs use classifications of high skilled and low skilled based
on workers' educational attainment. In this study we explore a wage-based skill measure using
information from a wage equation. Evidence from matched employer--employee data show that skill
is attributable to many variables other than educational length, for instance experience and type of
education. Applying our wage-based skill measure to a TFP growth analysis, we find that the TFP
residual decreases, indicating that more of the change in value-added is picked up by our skill
measure than when using a purely education-based measure of skill. Keywords: Skill composition, wages, TFP.