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Skill-biased technological change, international trade and the wage structure

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Author Info
Arnd Kölling () (Institute for Employment Research (IAB))
Thorsten Schank () (Institute for Employment Research (IAB))

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Abstract

During the last two decades, the labour demand structure in Germany and other OECD countries has experienced a decrease in the demand for low skilled and a rise in the demand for highly skilled employees. The adoption of modern technologies in the production process as well as the growth of international trade are often regarded as the main driving factors behind this change. On the other hand, it is often argued that a more flexible wage structure could counteract the falling demand for the unskilled. This study investigates these hypothesis for West Germany, 1994-1997, using the LIAB, a unique German linked employer-employee panel data set, which combines information from the German employment statistics and the IAB establishment panel. Employing a Generalised Leontief cost function and controlling for unobserved plant heterogeneity, the demand for three different skill types of labour is estimated by the SUR-Method. The results show that the major part of the skill structure is determined by wages, while we have found only minor impacts of a skill-biased technological change, of international trade and of short-run effects due to the business cycle.

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Publisher Info
Paper provided by International Conferences on Panel Data in its series 10th International Conference on Panel Data, Berlin, July 5-6, 2002 with number B1-3.

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Date of creation: Feb 2002
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Handle: RePEc:cpd:pd2002:b1-3

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Related research
Keywords: labour demand; substitution; skill-biased technological change; labour hoarding; international trade; linked employer-employee data;

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Find related papers by JEL classification:
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes

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References listed on IDEAS
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  3. Bellmann, Lutz & Schank, Thorsten, 2000. "Innovations, Wages and Demand for Heterogeneous Labour: New Evidence from a Matched Employer-Employee Data-Set," IZA Discussion Papers 112, Institute for the Study of Labor (IZA). [Downloadable!]
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  5. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, And The Demand For Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 339-376, February. [Downloadable!] (restricted)
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  6. Falk, Martin & Seim, Katja, 1999. "Workers' skill level and information technology : evidence from German service firms," ZEW Discussion Papers 99-14, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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Cited by:
(explanations, 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.)

  1. John T. Addison & Lutz Bellmann & Thorsten Schank & Paulino Teixeira, 2005. "The Demand for Labor: An Analysis Using Matched Employer-Employee Data from the German LIAB. Will the High Unskilled Worker Own-Wage Elasticity Please Stand Up?," IZA Discussion Papers 1780, Institute for the Study of Labor (IZA). [Downloadable!]
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  2. Carsten Ochsen & Heinz Welsch, 2005. "Technology, trade, and income distribution in West Germany: A factor-share analysis, 1976-1994," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 321-345, November. [Downloadable!]
  3. Carsten Ochsen, 2004. "Zukunft der Arbeit und Arbeit der Zukunft in Deutschland," Thuenen-Series of Applied Economic Theory 45, University of Rostock, Institute of Economics, Germany. [Downloadable!]
    Other versions:
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