@article{Assaf Sarid_Maoz_2021, title={Sectoral Heterogeneity, Income Inequality and Productivity Dynamics}, url={https://jid.journals.yorku.ca/index.php/jid/article/view/40462}, DOI={10.25071/1874-6322.40462}, abstractNote={<p>An intricate dynamic pattern has been commonly observed in many developed countries during the past decades. This pattern contains a simultaneous rise in the following economic variables: (i) total factor productivity, (ii) educated labor supply, (iii) wage-gap between high- and low-skilled workers, and (iv) income inequality. Typical explanations for the different elements of this pattern assume a skill-biased technical change (SBTC) or capital-skill complementarity. In this study we offer a complementing explanation for these phenomena, which is based on sectoral heterogeneity and endogenous factor mobility, rather than on an SBTC. We show that sectoral heterogeneity can amplify the effects of a technical change, whether skill-biased or general, in a manner that generates the four elements of the above described dynamic pattern. Furthermore, inequality can perform also a Kuznets-curve pattern, as was observed in several countries, in contrast to the inequality dynamics in typical SBTC models.</p>}, journal={Journal of Income Distribution®}, author={Assaf Sarid and Maoz, Yishay D.}, year={2021}, month={Nov.} }