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 Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 1079.
Date of creation: Mar 2008
Date of revision: May 2012
Contact details of provider:
Web page: http://www.econ.upf.edu/
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.
- Almut Balleer, Thijs van Rens, 2012. "Skill-Biased Technological Change and the Business Cycle," Kiel Working Papers 1775, Kiel Institute for the World Economy.
- Almut Balleer & Thijs van Rens, 2011. "Skill-Biased Technological Change and the Business Cycle," Working Papers 560, Barcelona Graduate School of Economics.
- Balleer, Almut & van Rens, Thijs, 2011. "Skill-Biased Technological Change and the Business Cycle," CEPR Discussion Papers 8410, C.E.P.R. Discussion Papers.
- 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-2008-03-25 (All new papers)
- NEP-HRM-2008-03-25 (Human Capital & Human Resource Management)
- NEP-LAB-2008-03-25 (Labour Economics)
- NEP-MAC-2008-03-25 (Macroeconomics)
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