Skill-biased technological change and the business cycle

Almut Balleer and Thijs van Rens

No 1775, Kiel Working Papers from Kiel Institute for the World Economy

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. Investment-specific technology shocks reduce the skill premium, indicating 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: 2012
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https://www.econstor.eu/bitstream/10419/58276/1/716978555.pdf (application/pdf)

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:zbw:ifwkwp:1775

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