The role of product diversification in skill-biased technological change

Choong Hyun Nam ()

MPRA Paper from University Library of Munich, Germany

Abstract: Since the 1980s, the labour demand has shifted toward more educated workers in the US. The most common explanation is that the productivity of skilled workers has risen relative to the unskilled, but it is not easy to explain why the aggregate labour productivity was stagnant during the 1980s. Alternatively, I have constructed a theoretical model which assumes that the demand for white-collar workers increases not because their productivity grows faster, but because increasing product variety requires white-collar workers as fixed input. Hence, the transition from Ford-style mass production towards more diversified one has shifted labour demand toward white-collar workers.

Keywords: Skill Demand; product innovation; inequality; productivity (search for similar items in EconPapers)
JEL-codes: E23 E24 E32 J31 L1 O3 O4 (search for similar items in EconPapers)
Date: 2014-12-31
New Economics Papers: this item is included in nep-eff, nep-lma and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:61029

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