“On the Skill Premium Hypothesis in Mexico: An Analysis by Scientific Area/Sobre la hipótesis del premio a la educación en México: Un análisis por área científica

This work estimates the short-run relationship between the ratio of the number of college-educated workers and high-school-educated workers with the ratio of their respective incomes. The analysis is by scientific area of the Mexican states along 2005-2010. It is demonstrated that the skill premium hypothesis is fulfilled: increases in the relative supply of skills reduce the skill premium for the assessed scientific areas. Estimates of the elasticity of substitution are stronger in Social Sciences than Engineering and Medicine. Tested against the skilled biased technical change (SBTC) hypothesis, this finding suggests that demand for skilled workers has not kept up with supply. On the other hand, empirical results reinforce the explanation of the persistence of low professional salaries. Economic policy recommendation claims a major connection among human capital and labor market by linking, for example, the higher education and production systems through the most direct stimulus.