Is Technology Factor-Neutral? Evidence from the US Manufacturing Sector

Sushanta Mallick () and Ricardo Sousa

No 26/2012, NIPE Working Papers from NIPE - Universidade do Minho

Abstract: This paper analyses the neutrality of technology using data from the NBER-CES Manufacturing industry database. We show that technology has a positive effect on the skilled-to-unskilled labour and wage ratios, offering a skill-premium for these skilled workers. We also find that technology has become more favourable towards skilled labour since the eighties, thereby, explaining the rise in the relative abundance of skilled workers. Finally, differences in productivity among the two labour inputs are important when they are relatively poor substitutes, despite the increase in the elasticity of substitution between unskilled and skilled labour that occurred over the past decades.

Keywords: Technological progress; skill premium; industry-level data. (search for similar items in EconPapers)
JEL-codes: D24 J24 O12 O47 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-eff and nep-lab
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