This file is part of IDEAS , which uses RePEc data
[ Papers |
Articles |
Software |
Books |
Chapters |
Authors |
Institutions |
JEL Classification |
NEP reports |
Search |
New papers by email |
Author registration |
Rankings |
Volunteers |
FAQ |
Blog |
Help! ]
Why Have Aggregate Skilled Hours Become So Cyclical Since the Mid-1980's? Author info | Abstract | Publisher info | Download info | Related research | Statistics CASTRO, Rui
COEN-PIRANI, Daniele
Additional information is available for the following
registered author(s):
This paper documents and discusses a dramatic change in the cyclical behavior of aggregate hours worked by individuals with a college degree (skilled workers) since the mid-1980’s. Using the CPS outgoing rotation data set for the period 1979:1-2003:4, we find that the volatility of aggregate skilled hours relative to the volatility of GDP has nearly tripled since 1984. In contrast, the cyclical properties of unskilled hours have remained essentially unchanged. We evaluate the extent to which a simple supply/demand model for skilled and unskilled labor with capital-skill complementarity in production can help explain this stylized fact. Within this framework, we identify three effects which would lead to an increase in the relative volatility of skilled hours: (i) a reduction in the degree of capital-skill complementarity, (ii) a reduction in the absolute volatility of GDP (and unskilled hours), and (iii) an increase in the level of capital equipment relative to skilled labor. We provide empirical evidence in support of each of these effects. Our conclusion is that these three mechanisms can jointly explain about sixty percent of the observed increase in the relative volatility of skilled labor. The reduction in the degree of capital-skill complementarity contributes the most to this result.
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file . Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Paper provided by Universite de Montreal, Departement de sciences economiques in its series Cahiers de recherche with number
2005-19.
Download reference. The following formats are available: HTML ,
plain text ,
BibTeX ,
RIS (EndNote),
ReDIF
Length: 55 pages
Date of creation: 2005Date of revision:
Handle: RePEc:mtl:montde:2005-19Contact details of provider: Postal: CP 6128, Succ. Centre-Ville, Montr�al, Qu�bec, H3C 3J7 Phone: (514) 343-6540 Fax: (514) 343-5831 Web page: http://www.sceco.umontreal.ca More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Sharon BREWER).
Keywords: Macroeconomics Business Cycles Volatility Skilled Hours Skill Premium Catal- Skill Comementarity Other versions of this item:
Find related papers by JEL classification: E24 - Macroeconomics and Monetary Economics - - Macroeconomics: 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 :
References listed on IDEAS 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.: Trajtenberg, M. & Bresnahan, T.F., 1992.
"General Purpose Technologies: "Engines of Growth" ,"
Papers
16-92, Tel Aviv.
Other versions:
Timothy F. Bresnahan & Manuel Trajtenberg, 1995.
"General Purpose Technologies "Engines of Growth?" ,"
NBER Working Papers
4148, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Bresnahan, Timothy F. & Trajtenberg, M., 1995.
"General purpose technologies 'Engines of growth'? ,"
Journal of Econometrics ,
Elsevier, vol. 65(1), pages 83-108, January.
[Downloadable!] (restricted) Edward C. Prescott, 2004.
"Why do Americans work so much more than Europeans? ,"
Quarterly Review ,
Federal Reserve Bank of Minneapolis, issue Jul, pages 2-13.
[Downloadable!]
Other versions:
Edward C. Prescott, 2003.
"Why do Americans work so much more than Europeans? ,"
Staff Report
321, Federal Reserve Bank of Minneapolis.
[Downloadable!] Edward C. Prescott, 2004.
"Why do Americans Work so Much More than Europeans? ,"
NBER Working Papers
10316, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Edward C. Prescott, 2004.
"Why Do Americans Work So Much More Than Europeans? ,"
Levine's Bibliography
122247000000000413, UCLA Department of Economics.
[Downloadable!] Ravn, Morten O. & Uhlig, Harald, 2001.
"On Adjusting the HP-Filter for the Frequency of Observations ,"
CEPR Discussion Papers
2858, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Other versions: Eswar Prasad, 1996.
"Skill Heterogeneity and the Business Cycle ,"
Canadian Journal of Economics ,
Canadian Economics Association, vol. 29(4), pages 910-29, November.
[Downloadable!] (restricted)
James H. Stock & Mark W. Watson, 2002.
"Has the Business Cycle Changed and Why? ,"
NBER Working Papers
9127, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Daron Acemoglu, 2002.
"Technical Change, Inequality, and the Labor Market ,"
Journal of Economic Literature ,
American Economic Association, vol. 40(1), pages 7-72, March.
[Downloadable!] (restricted)
Other versions: Hansen, Gary D., 1985.
"Indivisible labor and the business cycle ,"
Journal of Monetary Economics ,
Elsevier, vol. 16(3), pages 309-327, November.
[Downloadable!] (restricted)
Kydland, Finn E., 1984.
"Labor-force heterogeneity and the business cycle ,"
Carnegie-Rochester Conference Series on Public Policy ,
Elsevier, vol. 21(1), pages 173-208, January.
[Downloadable!] (restricted)
Per Krusell & Lee E. Ohanian & JosÈ-Victor RÌos-Rull & Giovanni L. Violante, 2000.
"Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis ,"
Econometrica ,
Econometric Society, vol. 68(5), pages 1029-1054, September.
Other versions: Bils, Mark J, 1985.
"Real Wages over the Business Cycle: Evidence from Panel Data ,"
Journal of Political Economy ,
University of Chicago Press, vol. 93(4), pages 666-89, August.
[Downloadable!] (restricted)
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.
[Downloadable!] (restricted)
Other versions: Hoyt Bleakley & Ann E. Ferris & Jeffrey C. Fuhrer, 1999.
"New data on worker flows during business cycles ,"
New England Economic Review ,
Federal Reserve Bank of Boston, issue Jul, pages 49-76.
[Downloadable!]
Aghion, Philippe & Howitt, Peter & Violante, Giovanni L, 2002.
" General Purpose Technology and Wage Inequality ,"
Journal of Economic Growth ,
Springer, vol. 7(4), pages 315-45, December.
[Downloadable!] (restricted)
Finn E. Kydland & Edward C. Prescott, 1993.
"Cyclical movements of the labor input and its implicit real wage ,"
Economic Review ,
Federal Reserve Bank of Cleveland, issue Q II, pages 12-23.
[Downloadable!]
Rogerson, Richard, 1988.
"Indivisible labor, lotteries and equilibrium ,"
Journal of Monetary Economics ,
Elsevier, vol. 21(1), pages 3-16, January.
[Downloadable!] (restricted)
Chang, Yongsung, 2000.
"Wages, business cycles, and comparative advantage ,"
Journal of Monetary Economics ,
Elsevier, vol. 46(1), pages 143-171, August.
[Downloadable!] (restricted)
Richard R. Nelson & Edmond S. Phelps, 1965.
"Investment in Humans, Technological Diffusion and Economic Growth ,"
Cowles Foundation Discussion Papers
189, Cowles Foundation, Yale University.
[Downloadable!]
Audra Bowlus & Haoming Liu & Chris Robinson, 2002.
"Business Cycle Models, Aggregation, and Real Wage Cyclicality ,"
Journal of Labor Economics ,
University of Chicago Press, vol. 20(2), pages 308-335, Part.
[Downloadable!]
David Card & John E. DiNardo, 2002.
"Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles ,"
Journal of Labor Economics ,
University of Chicago Press, vol. 20(4), pages 733-783, October.
[Downloadable!]
Other versions: Eswar Prasad & Michael P. Keane, 1993.
"The Relation Between Skill Levels and the Cyclical Variability of Employment, Hours, and Wages ,"
IMF Working Papers
93/44, International Monetary Fund.
Other versions: Narayana R. Kocherlakota, 1996.
"The Equity Premium: It's Still a Puzzle ,"
Journal of Economic Literature ,
American Economic Association, vol. 34(1), pages 42-71, March.
[Downloadable!] (restricted)
Other versions: Solon, Gary & Barsky, Robert & Parker, Jonathan A, 1994.
"Measuring the Cyclicality of Real Wages: How Important Is Composition Bias? ,"
The Quarterly Journal of Economics ,
MIT Press, vol. 109(1), pages 1-25, February.
[Downloadable!] (restricted)
Other versions:
Full
references
Access and
download statistics Did you know? A few items listed on IDEAS are over 2000 years old!
This page was last updated on 2008-9-30.
This information is provided to you by IDEAS at the Department of Economics , College of Liberal Arts and Sciences , University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics .