Sector adjustments

Within and between sector changes in 'skills' 

  • The two sectors here are tradeables and non-tradeables (I classified whole industries... tradeables includes manufacturing, mining, etc and non-tradeables includes services, retail/wholesale, etc)
  • High skill is defined as having greater than 12 years of schooling.
  • For the early 70's versus the early 90's, decompose total changes in high skilled employment into within and between sector changes
    • What does this decomposition tell you about the relative importance of globalization and technology in explaining increasing wage gaps between high and low skilled workers?
    • What might be wrong with this story?  How could within changes be due to globalization?
  • Note: these data are from the PSID