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The Effects of Factor Prices and Technological Change on the Occupational Demand for Labor: Evidence from Canadian Telecommunications

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  • Michael Denny
  • Melvyn Fuss

Abstract

This paper investigates the effect of automation on the occupational demand for labor using modern econometric demand theory. We are able to estimate labor demand functions derived from a production process characterized by variable elasticities of substitution, nonhomothetic output expansion effects, and nonneutral technical change. The model is applied to a large Canadian telecommunications firm, Bell Canada, for the period 1952-1972 when detailed data on four occupational groups, capital, materials, output, and the extent of automation are available. Our empirical results demonstrate the strong effects of innovative activity in this industry. Technical change was capital-using and labor-saving, with the labor-saving impact being felt most severely by the least skilled occupations.

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Bibliographic Info

Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

Volume (Year): 18 (1983)
Issue (Month): 2 ()
Pages: 161-176

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Handle: RePEc:uwp:jhriss:v:18:y:1983:i:2:p:161-176

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Web page: http://jhr.uwpress.org/

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Cited by:
  1. Paolo Epifani & Gino Gancia, 2004. "Increasing returns, imperfect competition and factor prices," Economics Working Papers 953, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2005.
  2. Bruinshoofd,Allard & Hollanders,Hugo & Weel,Bas,ter, 1999. "Knowledge Spillovers and Wage Inequality: An Empirical Investigation of Knowledge-Skill Complementarity," Research Memorandum 008, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  3. Hollanders,Hugo & Weel,Bas,ter, 1999. "Skill-Biased Technical Change: On Endogenous Growth, Wage Inequality and Government Intervention," Research Memorandum 013, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  4. Bruinshoofd,Allard & Weel,Bas,ter, 1998. "Skill-biased technical change: On technology and wages in the Netherlands," Research Memorandum 021, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  5. Werner Antweiler & Daniel Trefler, 2002. "Increasing Returns and All That: A View from Trade," American Economic Review, American Economic Association, vol. 92(1), pages 93-119, March.
  6. Petit, Pascal & Soete, Luc, 2001. "Is a biased technological change fueling dualism?," CEPREMAP Working Papers (Couverture Orange) 0103, CEPREMAP.
  7. Ann P. Bartel & Frank R. Lichtenberg, 1985. "The Comparative Advantage of Educated Workers in Implementing New Technology: Some Empirical Evidence," NBER Working Papers 1718, National Bureau of Economic Research, Inc.
  8. Hollanders,Hugo & Weel,Bas,ter, 1998. "Skill-Biased Technological Change in an Endogenous Growth Model," Research Memorandum 016, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).

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