Tuesday, March 8, 2011

More on the college premium

Krugman follows up on his Sunday piece with a recent blog post at NYT and another here where he answers my question.

Obviously the question of whether the college premium is going up, going down or staying flat is a matter of supply and demand for labor. On the demand side, technology can be a substitute for labor, and as tech improves (cheaper, better/smarter machines) the demand for substitutable labor should fall. But labor can also be a complement to technology, so as tech improves we should see an increase in demand. I think the jury is out in terms of the net effect, but clearly this is a matter of what types of labor serve as complements and what types are easily substituted.

Good stuff here from NBER.

As for the supply... here's a bit of info from the economist.

Interesting and related material here.

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