This paper formulates a simple skill and education model to explain how better access to higher education leads to stronger assortative mating on skills of parents and more polarized skill and earnings distributions of children. Swedish data show that in the second half of the 20th century more...

We combine two empirical observations in a general equilibrium occupational choice model. The first is that entrepreneurs have more control than employees over the employment of and accruals from assets, such as human capital. The second observation is that entrepreneurs enjoy higher returns to...

Estimates of the effect of education on GDP (the social return) have been hard to reconcile with micro evidence on the private return to schooling. We present a simple explanation combining two ideas: imperfect substitution and endogenous skill-biased technological progress and use cross-country...

This paper studies how linear tax and education policy should optimally respond to skill-biased technical change (SBTC). SBTC affects optimal taxes and subsidies by changing i) direct distributional benefits, ii) indirect redistributional effects due to wage-(de)compression, and iii) education...

The risk of investment in schooling has largely been ignored. We assess thevariance in the rate of return by surveying the international empirical literature from this freshperspective and by simulating risky earnings profiles in alternative options. choosingparameters on basis of the very...

There has been much attention for the causes of the increase in wageinequality in the United States since the mid seventies. DiNardo,Fortin, and Lemieux (1996) showed that minimum wages can explain 25%. The present paper uses a more general approach requiring noassumptions on how minimum wages...