The Effect of Investment-Specific Technology Shocks on the Gap of Wage and Employment by Workers¡Ç Skill or Tasks (in Korean)

Namju Kim ()
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Namju Kim: Economic Research Institute, The Bank of Korea

No 2018-19, Working Papers from Economic Research Institute, Bank of Korea

Abstract: This paper aims to assess the effect of investment-specific technology shocks(IST shocks) on the gap of wages and employment between different groups of workers in the Korean labor market. IST shocks can be identified by four long-run restrictions in a Structural Bayesian VAR framework. First, workers are categorized into skilled(college graduates and more) and unskilled(high-school graduates and less) ones by their educational attainment. After each shocks activates, including IST¡¤skill-biased technology¡¤other technology shocks, changes in the Skill-Unskill wage gap(skill premium) and employment differentials are examined. Second, workers are re-categorized into routine(tasked on repetitive and procedural jobs) and non-routine ones by their occupational tasks. By simulating IST¡¤routine-labor productivity¡¤other technology shocks respectively, it is originally checked how the Routine-Nonroutine wage gap and employment differentials will change. This paper shows that positive IST shocks can decrease the Skill-Unskill wage gap and increase the Routine-Nonroutine wage gap. It is also found, however, that positive IST shocks can not drive significant changes in employment differentials by any categorization.

Keywords: Investment-specific technology shocks; Technological change; Wage differentials; Employment; Structural VAR; Bayesian estimation (search for similar items in EconPapers)
JEL-codes: C11 C32 E22 J23 J31 O33 (search for similar items in EconPapers)
Pages: 67 pages
Date: 2018-07-18
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