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Changes in the Functional Structure of Firms and the Demand for Skill

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  • Maurin, Eric
  • Thesmar, David

Abstract

We describe and analyse the changes in the occupational structure of French manufacturing firms between 1984 and 1995. Firms employ a much greater proportions of engineers and researchers working on the design and marketing of new products and a much lower proportion of high-skilled experts working in administration-related activities. Firms have also reduced the share of production-related activities at both the levels of high-skilled and low-skilled workers. We develop a very simple labour demand model that shows the role played by technological change. By reducing the costs of activities that are the easiest to program in advance (notably for product fabrication), new information technologies make it possible to allocate more human and material resources to the activities that are the most difficult to program in advance, notably for the conception and marketing of new products. We show that this is the main channel through which new information technologies increase the demand for skill.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3831.

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Date of creation: Mar 2003
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Handle: RePEc:cpr:ceprdp:3831

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Keywords: skill; tasks; technological change;

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  1. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed The Labor Market?," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1169-1213, November.
  2. Timothy Dunne & Kenneth R Troske & John Haltiwanger, 1996. "Technology and Jobs: Secular Changes and Cyclical Dynamics," Working Papers 96-7, Center for Economic Studies, U.S. Census Bureau.
  3. Kenneth R Troske, 1994. "Evidence on the Employer Size-Wage Premium From Worker-Establishment Matched Data," Working Papers 94-10, Center for Economic Studies, U.S. Census Bureau.
  4. Stephen Machin & John Van Reenen, 1998. "Technology And Changes In Skill Structure: Evidence From Seven Oecd Countries," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1215-1244, November.
  5. 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.
  6. John DiNardo & Nicole M. Fortin & Thomas Lemieux, 1995. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," NBER Working Papers 5093, National Bureau of Economic Research, Inc.
  7. Dinardo, J.E. & Pischke, J.S., 1996. "The Returns to Computer Use Revisited: Have Pencils Changed the Wage Structure Too?," Working papers 96-12, Massachusetts Institute of Technology (MIT), Department of Economics.
  8. Dominique Goux & Eric Maurin, 1998. "The Decline in Demand for Unskilled Labor : An Empirical Analysis Method and its Application to France," Working Papers 98-53, Centre de Recherche en Economie et Statistique.
  9. 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.
  10. David, Paul A, 1990. "The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox," American Economic Review, American Economic Association, vol. 80(2), pages 355-61, May.
  11. David Autor & Frank Levy & Richard Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
  12. Entorf, Horst & Kramarz, Francis, 1997. "Does unmeasured ability explain the higher wages of new technology workers?," European Economic Review, Elsevier, vol. 41(8), pages 1489-1509, August.
  13. Hollanders,Hugo & Weel,Bas,ter, 2000. "Technology, Knowledge Spillovers and Changes in Skill Structure," Research Memorandum 001, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  14. Doms, Mark & Dunne, Timothy & Troske, Kenneth R, 1997. "Workers, Wages, and Technology," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 253-90, February.
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