The Allocation of Talent and U.S. Economic Growth

Citation: Chang-Tai Hsieh, Erik Hurst, Charles Jones, Peter Klenow (2013-02-22) The Allocation of Talent and U.S. Economic Growth.
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Download: http://www.stanford.edu/~chadj/papers.html#talent
Tagged: Economics (RSS)

Summary

Convergence in gender and race occupation distribution in last 50 years, especially in high-skilled occupations. Many studies on why convergence, none on aggregate productivity effect.

Paper measures aggregate productivity effect of decreasing misallocation of women and blacks, from 1960 to 2008 by examining changes in occupation outcomes through a model of occupational choice which includes occupational barriers, talent distribution, and occupation-specific technical change.

Data from 1960-2000 censuses and 2006-8 community survey, restricted to black men, black women, white men, and white women, ages 25-55, not unemployed, not active duty military -- focusing on after school and before retirement, and not dealing with transitory movement in and out of workforce.

Authors find results imply changes in occupational barriers facing women and blacks from 1960 to 2008 potentially account for 15-20% of growth in output per worker in that period, 75% of the increase in women's labor participation, and essentially all of the decrease in wage gap between women and blacks, and white men.

Barriers to children from poor families may be increasing, could explain recent trends. Other countries could also be investigating.