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The impact of office machinery, and computer capital on the demand for heterogeneous labour

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  • Falk, Martin
  • Koebel, Bertrand M.

Abstract

This paper analyzes the impact of office machinery and computer capital (OCM) on the demand for heterogeneous labor. A system of static and dynamic factor demand equations based on a variant of the generalized Box-Cox cost function nesting the translog, the generalized Leontief and the normalized quadratic functional form is derived and estimated. OCM capital and general capital are treated as quasi-fixed factors. Using panel data on 35 German industries, we find that OCM capital is complementary to all skill levels. For the manufacturing sector, the increase in OCM capital and general capital has accounted for at least 60 percent and 9 percent of the expanding employment of university graduates. In nonmanufacturing industries, we find that an increase in general capital tends to reduce unskilled workers. Wage effects and substitution effects between different types of labor and material inputs play a minor role in explaining employment changes of highly skilled workers and medium-skilled workers but these effects are more important in explaining the demand for unskilled workers. --

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 11 (2004)
Issue (Month): 1 (February)
Pages: 99-117

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Handle: RePEc:eee:labeco:v:11:y:2004:i:1:p:99-117

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

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  1. Berndt, Ernst R & Khaled, Mohammed S, 1979. "Parametric Productivity Measurement and Choice among Flexible Functional Forms," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1220-45, December.
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  10. Catherine J. Morrison, 2000. "Assessing The Productivity Of Information Technology Equipment In U.S. Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 79(3), pages 471-481, August.
  11. repec:rus:hseeco:15966 is not listed on IDEAS
  12. Schreyer, Paul, 2002. "Computer Price Indices and International Growth and Productivity Comparisons," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(1), pages 15-31, March.
  13. Koebel, Bertrand & Falk, Martin & Laisney, Francois, 2003. "Imposing and Testing Curvature Conditions on a Box-Cox Cost Function," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(2), pages 319-35, April.
  14. Per Krusell & Lee E. Ohanian & Jose-Victor Rios-Rull & Giovanni L. Violante, 1997. "Capital-skill complementarity and inequality: a macroeconomic analysis," Staff Report 239, Federal Reserve Bank of Minneapolis.
  15. Moch, Dietmar, 2001. "Price indices for information and communication technology industries: an application to the German PC market," ZEW Discussion Papers 01-20, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  16. Judson, Ruth A. & Owen, Ann L., 1999. "Estimating dynamic panel data models: a guide for macroeconomists," Economics Letters, Elsevier, vol. 65(1), pages 9-15, October.
  17. Falk, Martin & Koebel, Bertrand M., 2000. "A dynamic heterogeneous labour demand model for German manufacturing," ZEW Discussion Papers 00-16, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  18. Lucy Chennells & John Van Reenen, 1999. "Has technology hurt less skilled workers? A survey of the micro-econometric evidence," IFS Working Papers W99/27, Institute for Fiscal Studies.
  19. Konrad Faust & Wolfgang Gick & Herbert Hofmann & Ingrid Leiprecht & Albert Müller & Wolfgang Ochel & Barbara Schaden, 1999. "Tertiarisierung und neue Informations- und Kommunikationstechnologien," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 52(29), pages 23-34, November.
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  21. Paul, Catherine J Morrison & Siegel, Donald S, 2001. " The Impacts of Technology, Trade and Outsourcing on Employment and Labor Composition," Scandinavian Journal of Economics, Wiley Blackwell, vol. 103(2), pages 241-64, June.
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  23. Berman, Eli & Bound, John & Griliches, Zvi, 1994. "Changes in the Demand for Skilled Labor within U.S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 367-97, May.
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Cited by:
  1. Lichter, Andreas & Peichl, Andreas & Siegloch, Sebastian, 2014. "The own-wage elasticity of labor demand: A meta-regression analysis," ZEW Discussion Papers 14-016, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  2. O'Mahony, Mary & Robinson, Catherine & Vecchi, Michela, 2008. "The impact of ICT on the demand for skilled labour: A cross-country comparison," Labour Economics, Elsevier, vol. 15(6), pages 1435-1450, December.
  3. Jacob Funk Kirkegaard, 2007. "Offshoring, Outsourcing, and Production Relocation—Labor-Market Effects in the OECD Countries and Developing Asia," Working Paper Series WP07-2, Peterson Institute for International Economics.
  4. Koeniger, Winfried & Leonardi, Marco, 2006. "Capital Deepening and Wage Differentials: Germany vs. US," IZA Discussion Papers 2065, Institute for the Study of Labor (IZA).
  5. Ines P. Murillo, 2006. "Returns to Education and Human Capital Depreciation in Spain," ERSA conference papers ersa06p60, European Regional Science Association.
  6. Manuel A. Hidalgo Pérez & Jesús Rodríguez López & José María O´Kean Alonso, 2008. "Labor Demand and Information Technologies: Evidence for Spain, 1980-2005," Working Papers 08.12, Universidad Pablo de Olavide, Department of Economics.
  7. Jungmittag, Andre & Welfens, Paul J. J., 2006. "Telecommunications Dynamics, Output and Employment," IZA Discussion Papers 2379, Institute for the Study of Labor (IZA).
  8. Nathalie Chusseau & Michel Dumont, 2012. "Growing Income Inequalities in Advanced," Working Papers hal-00993359, HAL.
  9. M. Piva & E. Santarelli & M. Vivarelli, 2003. "The Skill Bias Effect of Technological and Organisational Change: Evidenceand Policy Implications," Working Papers 486, Dipartimento Scienze Economiche, Universita' di Bologna.
  10. Peichl, Andreas & Siegloch, Sebastian, 2010. "Accounting for Labor Demand Effects in Structural Labor Supply Models," IZA Discussion Papers 5350, Institute for the Study of Labor (IZA).
  11. Inés P. Murillo, 2011. "Human capital obsolescence: some evidence for Spain," International Journal of Manpower, Emerald Group Publishing, vol. 32(4), pages 426-445, July.
  12. repec:idb:brikps:61058 is not listed on IDEAS

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