LABOR MARKET EFFECTS OF TECHNOLOGY SHOCKS BIASED TOWARD THE TRADED SECTOR

Luisito Bertinelli, Olivier Cardi and Romain Restout

Working Papers of BETA from Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg

Abstract: Motivated by recent evidence pointing at an increasing contribution of asymmetric shocks across sectors to economic fluctuations, we explore the labor market effects of technology shocks biased toward the traded sector. Our VAR evidence for seventeen OECD countries reveals that the non-traded sector alone drives the increase in total hours worked following a technology shock that increases permanently traded relative to non-traded TFP. The shock gives rise to a reallocation of labor which contributes to 35% on average of the rise in non-traded hours worked. Both labor reallocation and variations in labor income shares are found empirically connected with factor-biased technological change. Our quantitative analysis shows that a two-sector open econ- omy model with flexible prices can reproduce the labor market effects we document empirically once we allow for technological change biased toward labor together with additional specific elements. When calibrating the model to country-specific data, its ability to account for the cross-country reallocation and redistributive effects we esti- mate increases once we let factor-biased technological change vary between sectors and across countries..

Keywords: Sector-biased technology shocks; Factor-augmenting effciency; Open economy; Labor reallocation; CES production function; Labor income share. (search for similar items in EconPapers)
JEL-codes: E25 E32 F11 F41 O33 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-int, nep-lab, nep-mac and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://beta.u-strasbg.fr/WP/2021/2021-09.pdf (application/pdf)

Related works:
Journal Article: Labor market effects of technology shocks biased toward the traded sector (2022)
Working Paper: Labor market effects of technology shocks biased toward the traded sector (2022)
Working Paper: Labor Market Effects of Technology Shocks Biased toward the Traded Sector (2021)
Working Paper: Labor Market Effects of Technology Shocks Biased Toward the Traded Sector (2021)
Working Paper: LABOR MARKET EFFECTS OF TECHNOLOGY SHOCKS BIASED TOWARD THE TRADED SECTOR (2020)
Working Paper: Labor Market Effects of Technology Shocks Biased toward the Traded Sector (2019)
Working Paper: Labor Market Effects of Technology Shocks Biased Toward the Traded Sector (2019)
Working Paper: Labor Market Effects of Technology Shocks BiasedToward the Traded Sector (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ulp:sbbeta:2021-09

Access Statistics for this paper

More papers in Working Papers of BETA from Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg Contact information at EDIRC.
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).