Skill-Biased Technological Change and the Business Cycle
AbstractOver the past two decades, technological progress in the United States has been biased towards skilled labor. What does this imply for business cycles? We construct a quarterly skill premium from the CPS and use it to identify skill-biased technology shocks in a VAR with long-run restrictions. Hours fall in response to skill-biased technology shocks, indicating that at least part of the technology-induced fall in total hours is due to a compositional shift in labor demand. Skill-biased technology shocks have no effect on the relative price of investment, suggesting that capital and skill are not complementary in aggregate production.
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Bibliographic InfoPaper provided by Barcelona Graduate School of Economics in its series Working Papers with number 560.
Date of creation: May 2011
Date of revision:
skill-biased technology; skill premium; VAR; long-run restrictions; capital-skill complementarity; business cycle;
Other versions of this item:
- Almut Balleer & Thijs van Rens, 2013. "Skill-Biased Technological Change and the Business Cycle," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1222-1237, October.
- Balleer, Almut & van Rens, Thijs, 2011. "Skill-Biased Technological Change and the Business Cycle," CEPR Discussion Papers 8410, C.E.P.R. Discussion Papers.
- Almut Balleer & Thijs van Rens, 2008. "Skill-biased technological change and the business cycle," Economics Working Papers 1079, Department of Economics and Business, Universitat Pompeu Fabra, revised May 2012.
- Almut Balleer, Thijs van Rens, 2012. "Skill-Biased Technological Change and the Business Cycle," Kiel Working Papers 1775, Kiel Institute for the World Economy.
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-15 (All new papers)
- NEP-BEC-2012-05-15 (Business Economics)
- NEP-LAB-2012-05-15 (Labour Economics)
- NEP-MAC-2012-05-15 (Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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