Elasticity of substitution again: substitutes and complements
01 Nov 1970-Vol. 22, Iss: 3, pp 289-296
About: The article was published on 1970-11-01. It has received 142 citations till now. The article focuses on the topics: Elasticity of substitution.
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TL;DR: In this paper, the authors focus on the value-capture problem for innovators in the digital economy, which involves some different challenges from those in the industrial economy, and the challenges are amplified for enabling technologies, which are the central focus of this article.
611 citations
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TL;DR: The authors studied the slowdown in the convergence of female and male wages in the 1990s compared to the 1980s and found that changes in human capital did not contribute to the slowdown, since women's relative human capital improved comparably in the two decades.
Abstract: Using Michigan Panel Study of Income Dynamics (PSID) data, we study the slowdown in the convergence of female and male wages in the 1990s compared to the 1980s. We find that changes in human capital did not contribute to the slowdown, since women's relative human capital improved comparably in the two decades. Occupational upgrading and deunionization had a larger positive effect on women's relative wages in the 1980s, explaining a portion of the slower 1990s convergence. However, the largest factor was that the "unexplained" gender wage gap fell much faster in the 1980s than the 1990s. Our evidence suggests that changes in labor force selectivity, changes in gender differences in unmeasured characteristics and in labor market discrimination, as well as changes in the favorableness of demand shifts each may have contributed to the slowing convergence of the unexplained gender pay gap.
553 citations
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TL;DR: In this article, the authors present a review of the history of complementarity in economics and give a brief survey of the recent history of the subject and its applications in the literature.
Abstract: THE TIME is ripe for a fresh, modern look at the concept of complementarity. Whatever the intrinsic merits of the concept, forty years ago it helped motivate Hicks and Allen to perform their classical "reconsideration" of ordinal demand theory. And, as I hope to show, the last word has not yet been said on this ancient preoccupation of literary and mathematical economists. The simplest things are often the most complicated to understand fully. For this reason, I have redrafted the present paper along the following lines: The main discussion is primarily literary. Then comes a mathematical section. Finally, I give a brief survey of the history of the subject.
469 citations
TL;DR: This article used cross-section data for 1970, the most recent year for which such data are available, to estimate aggregate production relationships between immigrants and the domestic labor force and the resulting estimates shed light on the substitutability between the stock of immigrants in the United States at that time, and the native work force.
Abstract: T HE United States is a country of immigrants and sons and daughters of former immigrants. From colonial times to the 1920s, America had an open door immigration policy. Although the formal policy generally welcomed immigrants, those who preceded the newcomers have never looked kindly on the arrival of new immigrants. Xenophobia has been a common reaction by Americans to large scale inflows. Although ethnocentrism undoubtedly is one reason for such isolationist feelings, fear of economic displacement is another underlying cause.' At the center of the debates over immigration policy has been the fear that the newcomers take jobs away from native Americans. The substitutability of natives for immigrants is critical in evaluating the validity of the displacement fears. A number of theoretical contributions, including Gerking and Mutti (1979), Grossman (1981) and Johnson (1980a) have dealt with the economic effects of international labor inflows. However, no empirical investigation of these issues has been undertaken. The absence of such studies is due, at least in part, to the lack of accurate data on the number of employed illegal immigrants, who comprise a substantial portion of the immigrant stock. While it is currently not possible to develop empirical estimates of the substitutability of illegal immigrants and natives, or even between the most recent wave of legal immigrants and natives, it is nonetheless useful to investigate the relationship in production that has historically existed between immigrants and the domestic labor force. In what follows, I use cross-section data for 1970, the most recent year for which such data are available, to estimate aggregate production relationships. The resulting estimates shed light on the substitutability between the stock of immigrants in the United States at that time, and the native work force. Until more is known about the employment behavior of more recent illegal and legal (especially refugee) immigrants, this is the best that can be accomplished.
460 citations
TL;DR: The authors studied the slowdown in the convergence of female and male wages in the 1990s compared to the 1980s and found that changes in human capital did not contribute to the slowdown, since women's relative human capital improved comparably in the two decades.
Abstract: Using Michigan Panel Study of Income Dynamics (PSID) data, the authors study the slowdown in the convergence of female and male wages in the 1990s compared to the 1980s. They find that changes in human capital did not contribute to the slowdown, since women's relative human capital improved comparably in the two decades. Occupational upgrading and deunionization had a larger positive effect on women's relative wages in the 1980s than in the 1990s, explaining part of the slower 1990s convergence. However, the largest factor was a much faster reduction of the “unexplained” gender wage gap in the 1980s than in the 1990s. The evidence suggests that changes in labor force selectivity, changes in gender differences in unmeasured characteristics and in labor market discrimination, and changes in the favorableness of demand shifts each may have contributed to the slowing convergence of the unexplained gender pay gap.
450 citations