Global Wage Inequality and the International Flow of Migrants

A framework for understanding the determinants in the variation in the pricing of skills across countries and the model underlying the Mincer specification of wages that is used widely to estimate the relationship between schooling and wages are described. A method for identifying skill prices and for testing the Mincer model, using wages and the human capital attributes of workers located around the world, is discussed. A global wage equation that nests the Mincer specification is estimated that provides skill price estimates for 140 countries. The estimates reject the Mincer model. The skill price estimates indicate that variation in skill prices dominates the cross-country variation in schooling levels or rates of return to schooling in accounting for the global inequality in the earnings of workers worldwide. Variation in skill prices and GDP across countries has opposite and significant effects on the number and quality of migrants to the United States.


Issue Date:
2010-01
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/56757
Total Pages:
32
JEL Codes:
J31; J61
Series Statement:
Economic Growth Center Discussion Paper
983




 Record created 2017-04-01, last modified 2017-08-25

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