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This paper examines the effect of shifts in the relative supply and demand of skills on the skill premiums and wage inequality in the British labour market 1972-2002. We test the Katz and Murphy (1992) hypothesis that the changes of skill premiums can be explained by their relative supply shifts, given stable or steadily growing relative demand. Alternatively, Machin (2001) hypothesis holds if the changes of skill premiums can be explained by relative demand shifts, given stable or steadily growing relative supply. From co-variation of relative skill wages and relative labour supplies of skills, we reject the hypothesis that the relative labour demand for skill is stable over time for either males or females. By using detrended relative skill wages and supplies, we infer that the acceleration of relative demand for skills caused a positive association between relative skill wages and labour supplies for males in the 1980s and the 2000s, and for females after the 1970s. Hence, the steadily growing relative demand in Katz and Murphy (1992) can only broadly fit with the cyclical co-variation of skill premiums and supply for males, but not for the long term increasing trend of skill premiums and supply of females. We find the acceleration of relative demand for skilled workers after the 1970s as suggested in Machin (2001) hypothesis.

This paper aims to investigate the cyclical changes in the wage structure of the United Kingdom over the period 1972-2002 using the General Household Survey (GHS). Wage structure of the UK shows a cyclical pattern, which may be from the different wage cyclicality of the top, middle and bottom percentile groups. Higher educated male workers have experienced a faster growth of the education premiums so that the wages of males have become more dispersed after the 1970s. However, female workers with only primary education have faster wage growth than higher educated ones. Moreover, the experience premiums of females have grown faster than males and become similar to males in recent years. Changes in the skill endowments and market valuation can account for the cyclical changes in female earnings structure over the entire period. The residual earnings inequality accounts for more than half changes in overall earnings inequality of males, which cannot be explained by changes in skill endowments and market returns. The evolution of the wage structure, including changes in gender gap, overall wage inequality, skill premiums as well as residual wage inequality are affected by business cycle.

This paper examines effects of the formation of physical and human capital on the growth of labour productivity, Total Factor Productivity (TFP) and wages in China, incorporating the market reform factors such as ownership shifts, population policy, openness and fiscal expenditures on education. We find that Chinese economic miracle is mainly pushed by the (physical) capital service rather than formation of human capital. The physical capital inputs contribute even more after 1994 as the returns to education decrease with the education expansion and increasing tuition fees. The traditional four economic regions of China show different growth patterns. The capital inputs mostly help the labour productivity growth in the West region and the wages growth in the Interior region, while human capital formation contributes to the TFP in all four regions. Moreover, provinces within each region present strong evidence of convergence of economic growth. The convergence is most prominent in the provinces within the Northeast and Coastal regions for labour productivity and TFP growth, suggesting fast technology spill-over within these regions.

This paper investigates the impact of training and education on productivity, in particular linking to a literature that emphasizes the need to reorganise production following adoption of ICT. The paper examines training at the total economy level and variation across industries, focusing especially on manufacturing versus market service sectors. It also examines the characteristics of those who receive training and outlines the incentives that underlie this.