When talent is allocated appropriately
In this paper Hsieh and al. study how discrimination in the labor market and barriers to the acquisition of human capital for white women, black men, and black women have distorted their occupational choices. In addition, they estimate the effects of a more efficient allocation of talent for aggregate income and productivity. They find that in the US during the period 1960-2010:
The Allocation of Talent and U.S. Economic Growth
Authors: Chang-Tai Hsieh, Erik Hurst, Charles I. Jones, Peter J. Klenow
From: Chicago University, Stanford University
Talent, trade and technological innovation
There is a group of service industries that are highly skill-intensive and widely traded internationally. These “Skilled Tradable Services” (STS) comprise industries such as management consulting, finance, information sectors, and the management of companies. Eckert and al. argue that the share of employment in these industries doubled from 1980 to 2010 as wage growth grew faster than in all other sectors in the U.S. economy. They attribute these changes to technological innovation which reduced communication costs:
STS industries have two features in common that have interacted with recent technological change to produce these developments. First, their primary input is knowledge, and this knowledge is used principally to codify and solve problems. However, while knowledge is fundamentally non-rival, sharing it is not free: communication frictions limit the ability of knowledge workers to exploit the non-rivalry of their knowledge. In recent decades, a series of innovations has drastically reduced the cost of supplying knowledge at a distance for these services.
Skilled Tradable Services: The Transformation of U.S. High-Skill Labor Markets
Authors: Fabian Eckert, Sharat Ganapati, Conor Walsh
From: Yale University, Georgetown University
