 Labour market miracle, productivity debacle: Measuring the effects of skill-biased and skill-neutral technical changeChristian Hutter and Enzo Weber Economic Modelling, 2021, vol. 102, issue C Abstract: This paper examines the role of skill-biased and skill-neutral technical change for productivity and employment. Thereby, we explore the puzzling macro development in Germany, witnessing job miracle and productivity debacle in parallel. In the literature, skill-biased technical change (SBTC) is known as an important driving factor for labour markets. We measure SBTC using comprehensive micro data and construct a structural macroeconometric framework identified by long-run restrictions. The results show that weaker SBTC explains 69 percent of the productivity slowdown since the early 2000s. Skill-biased technology shocks have a negative and skill-neutral technology shocks a positive hours effect. Twenty-five percent of the hours upswing since 2005 can be explained by reduced pressure from SBTC. Moreover, we analyse routine-biased technical change (RBTC) and find productivity and hours effects comparable to SBTC. However, only the latter can explain the job miracle – productivity debacle puzzle, since RBTC does not flatten substantially in the 2000s. Keywords: Productivity; Technology shocks; Skill bias; Hours worked; SVAR (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:102:y:2021:i:c:s0264999321001735 DOI: 10.1016/j.econmod.2021.105584 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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