Das Human-Kapital : Emerging Patterns in the Class Structure
Author
Summary, in English
This thesis consists of three self-contained papers in theoretical and computational macroeconomics and growth theory with income inequality and human capital accumulation as common themes. The first paper investigates what level of income tax progressivity is welfare-optimal given modern patterns of income inequality in the US. The paper develops a model for endogenous income inequality that fits US evidence while comparing popular income processes. It also permits discussing the welfare effects and trade-offs of tax reforms as individuals adjust their labor supply and human capital accumulation. We extend it in an incomplete market setup solved numerically, in which individuals can both form precautionary savings and adjust their labor supply. A calibrated version suggests that the progressivity of US income taxes is below its welfare optimum by around six percentage points.
The second paper develops a theoretical framework that explains the increasing and convex pattern of skill premia through diminishing aversion towards the ambiguous possibility of skill obsolescence. High-income workers are shown to invest more in education as their concern with forgone income is progressively lower than their less credentialed counterparts. As a result, high-skill (low-skill) individuals invest in their stock of human capital beyond (below) what is optimal if the true obsolescence frequency was known to them. This learning glut (deficit) subsequently pays large dividends (losses) during unexpected episodes that exhibit increased ambiguity. A calibration of the model is able to match the skill premium curve in the US economy.
The third paper develops a task-based framework which incorporates decisions on human capital investment based on the concepts of the psychometric literature on skill formation. The model predicts that labor immiseration -- i.e. full automation of the economy -- is inevitable unless learning efficiency is improved through capital taxation. While such a scheme can hinder labor immiseration, job polarization, however, is shown to be perpetual and exacerbating as low-index workers are more adversely affected by automation of routine tasks. The main mechanism for these results are shown to be differences in skill profiles, cross-productivity of skills and the faster accumulation rate of physical vis-à-vis human capital due to advanced skills being more difficult to master.
The second paper develops a theoretical framework that explains the increasing and convex pattern of skill premia through diminishing aversion towards the ambiguous possibility of skill obsolescence. High-income workers are shown to invest more in education as their concern with forgone income is progressively lower than their less credentialed counterparts. As a result, high-skill (low-skill) individuals invest in their stock of human capital beyond (below) what is optimal if the true obsolescence frequency was known to them. This learning glut (deficit) subsequently pays large dividends (losses) during unexpected episodes that exhibit increased ambiguity. A calibration of the model is able to match the skill premium curve in the US economy.
The third paper develops a task-based framework which incorporates decisions on human capital investment based on the concepts of the psychometric literature on skill formation. The model predicts that labor immiseration -- i.e. full automation of the economy -- is inevitable unless learning efficiency is improved through capital taxation. While such a scheme can hinder labor immiseration, job polarization, however, is shown to be perpetual and exacerbating as low-index workers are more adversely affected by automation of routine tasks. The main mechanism for these results are shown to be differences in skill profiles, cross-productivity of skills and the faster accumulation rate of physical vis-à-vis human capital due to advanced skills being more difficult to master.
Department/s
Publishing year
2021
Language
English
Publication/Series
Lund Economic Studies
Issue
228
Document type
Dissertation
Publisher
Lund University
Topic
- Economics
Keywords
- Income inequality
- Human capital accumulation
- Progressive income taxation
- Ambiguity aversion
- Skill premium
- Technology adoption
- Labor immiseration
- Job market polarization
- Task-based framework
- Fat tails
Status
Published
Project
- Affording Superstardom: Explaining Skill Premia's Convexity in Education
- Technology Adoption and Human Capital Accumulation
- Shaping Inequality: Progressive Taxation under Human Capital Accumulation
Supervisor
- Joakim Westerlund
- Emiliano Santoro
- Thomas Fischer
ISBN/ISSN/Other
- ISSN: 0460-0029
- ISBN: 978-91-7895-856-6
- ISBN: 978-91-7895-855-9
Defence date
11 June 2021
Defence time
13:15
Defence place
EC3:210
Opponent
- Tobias Broer (Associate Professor)