The Elasticity of Substitution between Skilled and Unskilled Labor: A Meta-Analysis

• Název práce v češtině: The Elasticity of Substitution between Skilled and Unskilled Labor: ; A Meta-Analysis
• Název v anglickém jazyce: The Elasticity of Substitution between Skilled and Unskilled Labor: ; A Meta-Analysis
• Akademický rok vypsání: 2015/2016
• Typ práce: diplomová práce
• Jazyk práce: angličtina
• Ústav: Institut ekonomických studií (23-IES)
• Vedoucí / školitel: doc. PhDr. Zuzana Havránková, Ph.D.
• Řešitel: skrytý - zadáno vedoucím/školitelem
• Datum přihlášení: 12.05.2016
• Datum zadání: 12.05.2016
• Datum a čas obhajoby: 31.01.2018 08:30
• Místo konání obhajoby: Opletalova - Opletalova 26, O206, Opletalova - místn. č. 206
• Datum odevzdání elektronické podoby: 04.01.2018
• Datum proběhlé obhajoby: 31.01.2018
• Oponenti: prof. Ing. et Ing. Luboš Komárek, M.Sc., MBA, Ph.D.

Seznam odborné literatury

Autor, David H. ,“Skill Biased Technical Change and Rising Inequality: What is the Evidence? What are the
Alternatives?” MIT and NBER (2002)

Behar, Alberto.”The elasticity of substitution between skilled and unskilled labor in developing countries is
about 2.“; (2010).

Ciccone, Antonio, and Giovanni Peri. "Long-run substitutability between more and less educated workers: evidence from US states, 1950–1990." Review of Economics and statistics 87.4 (2005): 652-663.

Egger, Matthias, et al.“Bias in meta-analysis detected by a simple, graphical test.“ Bmj 315.7109 (1997): 629-634.

Freeman, Richard B. “Demand for education.“ Handbook of labor economics1. (1986): 357-386.

Hoeting, Jennifer A., et al. “Bayesian model averaging: a tutorial.“ Statistical science (1999): 382-401.

Katz, Lawrence F., and Claudia Dale Goldin. “The race between education and technology.“ Cambridge:
Harvard University Press, 2008.

Raftery, Adrian E., David Madigan, and Jennifer A. Hoeting. "Bayesian model averaging for linear regression models." Journal of the American Statistical Association 92.437 (1997): 179-191.

Předběžná náplň práce v anglickém jazyce

Motivation:

There exist numerous scientific studies dealing with the topic of qualified workers replacing the unqualified and vice versa. One approach to quantify this phenomenon is to measure the elasticity of substitution between the two groups. This thesis aims to provide a systematic investigation of the studies measuring the elasticity of substitution between skilled and unskilled labour.

Hypotheses:
1. Hypothesis #1: The elasticity of substitution between more and less qualified workers is in the range of 0.5 – 2.5 as suggested by earlier studies.
2. Hypothesis #2: The estimate of elasticity significantly depends on estimation method used by the study.
3. Hypothesis #3: The estimate of elasticity significantly depends on characteristics of the country studied.
4. Hypothesis #4: Substitutability of skilled and unskilled labor is higher in the long run than in the short-run.
5. Hypothesis #5: Accounting for the capital-skill complementarity effect has an impact on estimate of elasticity.
6. Hypothesis #6: There is no publication bias - the elasticity estimates are not systematically shifted due to selective reporting.



Methodology:

Firstly we will accumulate results of multiple studies and different characteristics of these studies (such as used methods, data types, control variables, countries studied, etc. Next we will construct our dataset. To select the appropriate model to assess which characteristics of the research have impact on its result we will use Bayesian Model Averageing (BMA), described for instance by Hoeting et al. (1999). This approach prevents from underestimating uncertainty in the estimated coefficients, as the posterior distribution of the estimated quantity is a weighted average of the posterior probability distributions under each possible model given a set of potential predictors. (Raftery et al., 1997) Our own estimation of the elasticity based on summarized evidence will follow. Rather than simply taking mean of all estimated elasticities of substitution, we will try to define “best practice“ in literature and generate our estimate as a fitted value using maximum value for every aspect of the study which is preferred and minima for the unwanted aspects.
Publication bias will be tested following the example of Egger et al. (1997) by examining the assymetry of the so-called funnel plot and, more formally, statistically examining the relationship between estimates and standard errors.



Expected Contribution:

As the estimated elasticity of substitution between skilled and unskilled labour varies from one study to another. Therefore a meta-analysis is needed to summarize and compare these findings in a structured and objective way and eventually correct for systematic mismeasurements.This helps readers to better understand differences between results and correctly interpret existing evidence .
Outline:

Introduction

Methods of the Elasticity estimation

Dataset collection and description

Publication bias and corrective measures

Results

Conclusion