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Skill-biased technical change in US manufacturing: a general index approach

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  • Baltagi, Badi H.
  • Rich, Daniel P.

Abstract

This article applies recent advances in productivity and efficiency measurement to the evaluation of skillbiased technical change. Using the general index approach we are able to establish an explicit and unconstrained time path for nonneutral technical change between production and nonproduction labor in U.S. manufacturing industries over the 1959-1996 period. Our findings confirm the prevailing interpretation in the labor economics literature that substantial reductions in the relative share of production labor are attributable to a sustained period of nonneutral technical change. However, we find that skill-biased technical change effects are most evident prior to 1983. This predates the diffusion of personal computer technologies in the workplace and the dramatic wage structure changes associated with the 1980’s. In contrast to prevailing alternatives, the general index approach also permits us to explain observed shifts in relative labor demand as a combination of price-induced substitution, nonhomothetic output effects and skill-biased technical change responses to a range of proposed elements.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Econometrics.

Volume (Year): 126 (2005)
Issue (Month): 2 (June)
Pages: 549-570

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Handle: RePEc:eee:econom:v:126:y:2005:i:2:p:549-570

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Web page: http://www.elsevier.com/locate/jeconom

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Cited by:
  1. Badi H. Baltagi & Alain Pirotte, 2010. "Seemingly Unrelated Regressions with Spatial Error Components," Center for Policy Research Working Papers 125, Center for Policy Research, Maxwell School, Syracuse University.
  2. Sauer, Johannes & Graversen, Jesper T. & Park, Timothy A., 2006. "Breathtaking or Stagnating? - Productivity, Technical Change and Structural Dynamics in Danish Organic Farming," 2006 Annual meeting, July 23-26, Long Beach, CA 21481, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  3. Frank R. Lichtenberg, 2009. "The Quality of Medical Care, Behavioral Risk Factors, and Longevity Growth," NBER Working Papers 15068, National Bureau of Economic Research, Inc.
  4. Ariel Casarin, 2014. "Productivity throughout regulatory cycles in gas utilities," Journal of Regulatory Economics, Springer, vol. 45(2), pages 115-137, April.
  5. Cörvers Frank & Meriküll Jaanika, 2008. "Occupational Structures across 25 EU Countries: The Importance of Industry Structure and Technology in Old and New EU Countries," ROA Research Memorandum 002, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  6. Shabbar Jaffry & Yaseen Ghulam & Joe Cox, 2006. "Impact of Regulatory Reforms on Labour Efficiency in the Indian and Pakistani Commercial Banks," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(4), pages 1085-1102.
  7. Sauer, Johannes & Park, Timothy A. & Graversen, Jesper T., 2007. "Organic Farming In Denmark-Productivity, Technical Change And Market Exit," 47th Annual Conference, Weihenstephan, Germany, September 26-28, 2007 7618, German Association of Agricultural Economists (GEWISOLA).
  8. Ljubica Nedelkoska & Simon Wiederhold, 2010. "Technology, outsourcing, and the demand for heterogeneous labor: Exploring the industry dimension," Jena Economic Research Papers 2010-052, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.

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