Resumen de Elasticity of substitution and disaggregation of labor by skill level: Empirical measurement using a global database
The 45 region ´ 50 commodity ´ 5 primary factor version of the Global Trade Analysis Project’s [GTAP] database provides us with the splits of total labor payments into skilled and unskilled labor—presupposing substitution possibilities between them. Given the skilled labor payment shares of the GTAP database, we offer an ex post rationalization within a production-theoretic framework. This relies on inter-regional covariation in the GTAP shares and in measures of educational attainment. Adoption of a suitable nesting of skilled-unskilled labor in GTAP’s production function enables us to derive a ‘reasonable’ value for the (implicit) substitution elasticity between skilled-unskilled labors.
