Skill-Biased Technological Change and the Business Cycle

Thijs van Rens and Almut Balleer

No 8410, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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: Business cycle; Capital-skill complementarity; Long-run restrictions; Skill premium; Skill-biased technology; Var (search for similar items in EconPapers)
JEL-codes: E24 E32 J24 J31 (search for similar items in EconPapers)
Date: 2011-06
New Economics Papers: this item is included in nep-bec, nep-hrm, nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Working Paper: Skill-Biased Technological Change and the Business Cycle (2015)
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