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Skilled labor -- augmenting technical progress in U.S. manufacturing

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  • James A. Kahn
  • Jong-Soo Lim

Abstract

This paper examines the role of skilled labor in the growth of total factor productivity. We use panel data from manufacturing industries within the United States to assess the extent to which productivity growth in yearly cross-sections of U.S. manufacturing industries is tied to industry shares of skilled labor inputs. We find evidence of an explosion in skilled-labor augmenting technological progress during the period from approximately 1972 to 1981, which precedes a period of suddenly increasing wage inequality and rapid growth in the relative wages of educated and experienced workers. We also provide evidence from aggregate manufacturing data that confirm this shift pre- and post-1972, and show that all of the findings are broadly consistent with the behavior of relative wages and employment.

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Bibliographic Info

Paper provided by Federal Reserve Bank of New York in its series Research Paper with number 9738.

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Date of creation: 1997
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Handle: RePEc:fip:fednrp:9738

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Keywords: Labor productivity ; Technology ; Manufactures;

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  1. Timothy Dunne & John Haltiwanger & Kenneth R. Troske, 1996. "Technology and Jobs: Secular Changes and Cyclical Dynamics," NBER Working Papers 5656, National Bureau of Economic Research, Inc.
  2. Binswanger, Hans P., 1973. "The Measurement Of Technical Change Biases With Many Factors Of Production," Staff Papers, University of Minnesota, Department of Applied Economics 14205, University of Minnesota, Department of Applied Economics.
  3. 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, MIT Press, vol. 113(4), pages 1169-1213, November.
  4. Bound, John & Johnson, George, 1992. "Changes in the Structure of Wages in the 1980's: An Evaluation of Alternative Explanations," American Economic Review, American Economic Association, American Economic Association, vol. 82(3), pages 371-92, June.
  5. Daron Acemoglu, 1998. "Why Do New Technologies Complement Skills? Directed Technical Change And Wage Inequality," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 113(4), pages 1055-1089, November.
  6. Greenwood, J. & Hercowitz, Z. & Krusell, P., 1996. "Long-Run Implications of Investment-Specific Technological Change," RCER Working Papers 420, University of Rochester - Center for Economic Research (RCER).
  7. Gordon, Robert J., 1990. "The Measurement of Durable Goods Prices," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226304557, March.
  8. Andreas Hornstein & Per Krusell, 1996. "Can Technology Improvements Cause Productivity Slowdowns?," NBER Chapters, in: NBER Macroeconomics Annual 1996, Volume 11, pages 209-276 National Bureau of Economic Research, Inc.
  9. repec:fth:prinin:377 is not listed on IDEAS
  10. Berman, Eli & Bound, John & Griliches, Zvi, 1994. "Changes in the Demand for Skilled Labor within U.S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 109(2), pages 367-97, May.
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