Shifts and Twists in the Relative Productivity of Skilled Labor: Reconciling Accelerated SBTC with the Productivity Slowdown
Philip Marey () and
Arnaud Dupuy ()
No 118, Econometric Society 2004 North American Summer Meetings from Econometric Society
Abstract:
Skill-biased technical change is usually interpreted in terms of the efficiency parameters of skilled and unskilled labor. This implies that the relative productivity of skilled workers changes proportionally in all tasks. In contrast, we argue that technical changes also affect the curvature of the distribution of relative productivity. Building on Rosen's (1978) tasks assignment model, this implies that not only the efficiency parameters of skilled and unskilled workers change, but also the elasticity of substitution between skill-types of labor. Using data for the United States between 1963 and 2002, we find significant empirical support for a decrease in the elasticity of substitution at the end of the 70s followed by an increase at the end of the 80s. This pattern of the elasticity of substitution has contributed to the slowdown in labor productivity in the late 70s through the 80s and to a speedup in the 90s
Keywords: Assignment; SBTC; output growth; cointegration and regime shifts (search for similar items in EconPapers)
JEL-codes: J20 J31 O30 (search for similar items in EconPapers)
Date: 2004-08-11
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Citations: View citations in EconPapers (4)
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