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White-collar employment, inequality, and technological change

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  • Volker Grossmann

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Abstract

This paper develops a R&D-based growth model to examine the relationship between technological change, growth, walfare and the demand for skillintensive, analytical activities (e.g., product development, quality-control, and design of advertising campaigns). Results are consistent with evidence on rising employment shares of skilled, white-collar workers and increases in the skill premium in the US or UK. Moreover, accounting for a simultaneous decrease in overhead labor requirements (e.g., administrative staff), the analysis suggests that recent technology shifts have no systematic impact on firm sizes and on the economy’s rate of growth. This sheds some light into the “Solow-productivity paradox”. Copyright Springer-Verlag 2005

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Bibliographic Info

Article provided by Springer in its journal Journal of Economics.

Volume (Year): 10 (2005)
Issue (Month): 1 (December)
Pages: 119-142

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Handle: RePEc:kap:jeczfn:v:10:y:2005:i:1:p:119-142

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Web page: http://www.springerlink.com/link.asp?id=108909

Related research

Keywords: analytical skills; skill premium; R&D-based growth; white-collar employment; O31; O33; J21; J31;

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  1. Skaperdas, Stergios, 1996. "Contest Success Functions," Economic Theory, Springer, vol. 7(2), pages 283-90, February.
  2. Eli Berman & John Bound & Stephen Machin, 1997. "Implications of Skill-Biased Technological Change: International Evidence," NBER Working Papers 6166, National Bureau of Economic Research, Inc.
  3. Nahuis, Richard & Smulders, Sjak, 2002. " The Skill Premium, Technological Change and Appropriability," Journal of Economic Growth, Springer, vol. 7(2), pages 137-56, June.
  4. David Thesmar & Mathias Thoenig, 2000. "Creative Destruction And Firm Organization Choice," The Quarterly Journal of Economics, MIT Press, vol. 115(4), pages 1201-1237, November.
  5. Volker Grossmann, 2003. "Contest for Attention in a Quality-Ladder Model of Endogenous Growth," CESifo Working Paper Series 1003, CESifo Group Munich.
  6. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-84, August.
  7. Smulders, Sjak & van de Klundert, Theo, 1995. "Imperfect competition, concentration and growth with firm-specific R & D," European Economic Review, Elsevier, vol. 39(1), pages 139-160, January.
  8. Timothy F. Bresnahan, 1997. "Computerization and Wage Dispersion: An Analytical Reinterpretation," Working Papers 97031, Stanford University, Department of Economics.
  9. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
  10. Volker Grossmann, 2000. "Skilled Labor Reallocation, Wage Inequality, and Unskilled Unemployment," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 156(3), pages 473-, September.
  11. Jacobs, Bas & Nahuis, Richard, 2002. "A general purpose technology explains the Solow paradox and wage inequality," Economics Letters, Elsevier, vol. 74(2), pages 243-250, January.
  12. Alwyn Young, 1998. "Growth without Scale Effects," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 41-63, February.
  13. Stephen Machin & John Van Reenen, 1998. "Technology and changes in skill structure: evidence from seven OECD countries," IFS Working Papers W98/04, Institute for Fiscal Studies.
  14. 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.
  15. DiNardo, John E & Pischke, Jorn-Steffen, 1997. "The Returns to Computer Use Revisited: Have Pencils Changed the Wage Structure Too?," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 291-303, February.
  16. Cohen, Wesley M. & Levin, Richard C., 1989. "Empirical studies of innovation and market structure," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 18, pages 1059-1107 Elsevier.
  17. Falkinger, Josef & Grossmann, Volker, 2002. "Workplaces in the Primary Economy and Wage Pressure in the Secondary Labor Market," IZA Discussion Papers 523, Institute for the Study of Labor (IZA).
  18. Grossmann Volker, 2002. "Quality Improvements, the Structure of Employment, and the Skill-bias Hypothesis Revisited," The B.E. Journal of Macroeconomics, De Gruyter, vol. 2(1), pages 1-25, April.
  19. Jack E. Triplett, 1999. "The Solow productivity paradox: what do computers do to productivity?," Canadian Journal of Economics, Canadian Economics Association, vol. 32(2), pages 309-334, April.
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