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Capital-Skill Complementarity in West German Manufacturing

Author

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  • FitzRoy, Felix
  • Funke, Michael

Abstract

Capital-skill complementarity is tested for two different definitions of skill using data from 32 West German manufacturing industries from 1975-1990. Using the Kmenta approximation for the CES function provides strong support for complementarity between white collar workers and capital. On the other hand, when "skill" is defined as skilled white collar and blue collar workers, we find essentially no evidence for complementarity. This surprising result suggests that the official classification of skilled production workers does not capture the planning activity most complementary to increasing capital intensity and technological progress.

Suggested Citation

  • FitzRoy, Felix & Funke, Michael, 1995. "Capital-Skill Complementarity in West German Manufacturing," Empirical Economics, Springer, vol. 20(4), pages 651-665.
    • Handle: RePEc:spr:empeco:v:20:y:1995:i:4:p:651-65
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    Cited by:

    1. E. Moreno-Galbis & Henri Sneessens, 2007. "Low-skilled unemployment, capital-skill complementarity and embodied technical progress," Recherches économiques de Louvain, De Boeck Université, vol. 73(3), pages 241-272.
    2. Philippe Askenazy & Eva Moreno Galbis, 2007. "The Impact of Technological and Organizational Changes on Labor Flows. Evidence on French Establishments," LABOUR, CEIS, vol. 21(2), pages 265-301, June.
    3. Puhani, Patrick A., 2001. "Wage rigidities in Western Germany? Microeconometric evidence from the 1990s," ZEW Discussion Papers 01-36, ZEW - Leibniz Centre for European Economic Research.
    4. Koebel, Bertrand M. & Falk, Martin, 1999. "Curvature conditions and substitution pattern among capital, energy, materials and heterogeneous labour," ZEW Discussion Papers 99-06, ZEW - Leibniz Centre for European Economic Research.
    5. Martin Falk & Bertrand Koebel, 2001. "A dynamic heterogeneous labour demand model for German manufacturing," Applied Economics, Taylor & Francis Journals, vol. 33(3), pages 339-348.
    6. Eduardo Lora & Mauricio Olivera, 1998. "Macro Policy and Employment Problems in Latin America," Research Department Publications 4116, Inter-American Development Bank, Research Department.
    7. Kaiser, Ulrich, 1998. "The Impact of New Technologies on the Demand for Heterogenous Labour: Empirical Evidence from the German Business-Related Services Sector," ZEW Discussion Papers 98-26, ZEW - Leibniz Centre for European Economic Research.
    8. Eduardo Lora & Mauricio Olivera, 1998. "Políticas macro y problemas del empleo en América Latina," Research Department Publications 4117, Inter-American Development Bank, Research Department.
    9. Falk, Martin & Koebel, Bertrand M., 1997. "The Demand of Heterogeneous Labour in Germany," ZEW Discussion Papers 97-28, ZEW - Leibniz Centre for European Economic Research.
    10. Fitzenberger, Bernd & Franz, Wolfgang, 1997. "Flexibilität der qualifikatorischen Lohnstruktur und Lastverteilung der Arbeitslosigkeit: Eine ökonometrische Analyse für Westdeutschland," ZEW Discussion Papers 97-32, ZEW - Leibniz Centre for European Economic Research.
    11. Wu, Wei-Ming & Lin, Tsan-Hwan, 2015. "Selection behavior of the global container shipping industry for carrier-owned and leased containers," Transport Policy, Elsevier, vol. 37(C), pages 11-19.
    12. Michael Stimmelmayr, 2009. "Wage Inequality in Germany: Disentangling Demand and Supply Effects," CESifo Working Paper Series 2802, CESifo.
    13. Eva, MORENO-GALBIS, 2004. "Unemployment and Endogenous Growth with Capital-Skill Complementarity," LIDAM Discussion Papers IRES 2004001, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    14. Zhao, Lexin & Fang, Hongsheng, 2022. "Investment incentives and the relative demand for skilled labor: Evidence from accelerated depreciation policies in China," China Economic Review, Elsevier, vol. 73(C).
    15. Steiner, Viktor & Mohr, Robert, 1998. "Industrial change, stability of relative earnings, and substitution of unskilled labor in West-Germany," ZEW Discussion Papers 98-22, ZEW - Leibniz Centre for European Economic Research.

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