Crude substitution
Subtitle: the cyclical dynamics of oil prices and the college premium
By: Linnea Polgreen and Pedro Silos
Contributors: Silos, Pedro; Federal Reserve Bank of Atlanta
Series: Working paper series / Federal Reserve Bank of Atlanta -- 2006-14; Working paper series (Federal Reserve Bank of Atlanta : Online) -- 2006-14
Publisher: Federal Reserve Bank of Atlanta
Published: 2006
Place of publication: Atlanta, Ga.]
Language: eng
Format: [electronic resource] :
Description: "Higher oil price shocks benefit unskilled workers relative to skilled workers: Over the business cycle, energy prices and the skill premium display a strong negative correlation. This correlation is robust to different detrending procedures. We construct and estimate a model economy with energy use and heterogeneous skills and study its business cycle implications, in particular the cyclical behavior of oil prices and the skill premium. In our model economy, the skill premium and the ratio of hours worked by skilled workers to hours worked by unskilled workers are both negatively correlated with oil prices over the business cycle. For the skill premium and energy prices to move in opposite directions, the key ingredient is the larger substitutability of capital for unskilled labor than for skilled labor. The negative correlation arises even when energy and capital are fairly good substitutes. "--Federal Reserve Bank of Atlanta web site.
Notes: Title from PDF file as viewed on Oct. 5, 2006

Includes bibliographical references.

Also available in print.

System requirements: Adobe Acrobat Reader.

Mode of access: World Wide Web.