Skill-biased technological change and the business cycle

Almut Balleer and Thijs van Rens

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: Over the past two decades, technological progress in the United States has been biased towards skilled labor. What does this imply for business cycles? We construct a quarterly skill premium from the CPS and use it to identify skill-biased technology shocks in a VAR with long-run restrictions. Hours fall in response to skill-biased technology shocks, indicating that at least part of the technology-induced fall in total hours is due to a compositional shift in labor demand. Skill-biased technology shocks have no effect on the relative price of investment, suggesting that capital and skill are not complementary in aggregate production.

Keywords: Skill-biased technology; skill premium; VAR; long-run restrictions; capital-skill complementarity; business cycle (search for similar items in EconPapers)
JEL-codes: E24 E32 J24 J31 (search for similar items in EconPapers)
Date: 2008-03, Revised 2012-05
New Economics Papers: this item is included in nep-hrm, nep-lab and nep-mac
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Skill-Biased Technological Change and the Business Cycle (2015)
Journal Article: Skill-Biased Technological Change and the Business Cycle (2013)
Working Paper: Skill-biased technological change and the business cycle (2012)
Working Paper: Skill-Biased Technological Change and the Business Cycle (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1079

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