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White-collar employment, inequality, and technological change

  • Volker Grossmann

    ()

This paper develops a R&D-based growth model to examine the relationship between technological change, growth, walfare and the demand for skillintensive, analytical activities (e.g., product development, quality-control, and design of advertising campaigns). Results are consistent with evidence on rising employment shares of skilled, white-collar workers and increases in the skill premium in the US or UK. Moreover, accounting for a simultaneous decrease in overhead labor requirements (e.g., administrative staff), the analysis suggests that recent technology shifts have no systematic impact on firm sizes and on the economy’s rate of growth. This sheds some light into the “Solow-productivity paradox”. Copyright Springer-Verlag 2005

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Article provided by Springer in its journal Journal of Economics.

Volume (Year): 10 (2005)
Issue (Month): 1 (December)
Pages: 119-142

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Handle: RePEc:kap:jeczfn:v:10:y:2005:i:1:p:119-142
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=108909

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  1. Bresnahan, Timothy F, 1999. "Computerisation and Wage Dispersion: An Analytical Reinterpretation," Economic Journal, Royal Economic Society, vol. 109(456), pages F390-415, June.
  2. Machin, S. & Van Reenen, J., 1997. "Technology and Changes in Skill Structure: Evidence from Seven OECD Countries," Papers 24, Centre for Economic Performance & Institute of Economics.
  3. Smulders, J.A. & van de Klundert, T.C.M.J., 1995. "Imperfect competition, concentration and growth with firm-specific R&D," Other publications TiSEM 3287368d-bf5d-421a-91c1-e, Tilburg University, School of Economics and Management.
  4. E. Berman & J. Bound & S. Machin, 1997. "Implications of skill-biased technological change: international evidence," LSE Research Online Documents on Economics 20314, London School of Economics and Political Science, LSE Library.
  5. DiNardo, John E & Pischke, Jorn-Steffen, 1997. "The Returns to Computer Use Revisited: Have Pencils Changed the Wage Structure Too?," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 291-303, February.
  6. Nahuis, R. & Smulders, J.A., 2002. "The skill premium, technological change and appropriability," Other publications TiSEM 7970ce9d-477a-426e-9ba6-8, Tilburg University, School of Economics and Management.
  7. Skaperdas, Stergios, 1996. "Contest Success Functions," Economic Theory, Springer, vol. 7(2), pages 283-90, February.
  8. Falkinger, Josef & Grossmann, Volker, 2002. "Workplaces in the Primary Economy and Wage Pressure in the Secondary Labor Market," IZA Discussion Papers 523, Institute for the Study of Labor (IZA).
  9. 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, vol. 109(2), pages 367-97, May.
  10. Jacobs, Bas & Nahuis, Richard, 2002. "A general purpose technology explains the Solow paradox and wage inequality," Economics Letters, Elsevier, vol. 74(2), pages 243-250, January.
  11. Volker Grossmann, 2003. "Contest for Attention in a Quality-Ladder Model of Endogenous Growth," CESifo Working Paper Series 1003, CESifo Group Munich.
  12. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
  13. Alwyn Young, 1998. "Growth without Scale Effects," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 41-63, February.
  14. Cohen, Wesley M. & Levin, Richard C., 1989. "Empirical studies of innovation and market structure," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 18, pages 1059-1107 Elsevier.
  15. Jack E. Triplett, 1999. "The Solow productivity paradox: what do computers do to productivity?," Canadian Journal of Economics, Canadian Economics Association, vol. 32(2), pages 309-334, April.
  16. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-84, August.
  17. Volker Grossmann, 2000. "Skilled Labor Reallocation, Wage Inequality, and Unskilled Unemployment," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 156(3), pages 473-, September.
  18. Grossmann Volker, 2002. "Quality Improvements, the Structure of Employment, and the Skill-bias Hypothesis Revisited," The B.E. Journal of Macroeconomics, De Gruyter, vol. 2(1), pages 1-25, April.
  19. David Thesmar & Mathias Thoenig, 2000. "Creative Destruction And Firm Organization Choice," The Quarterly Journal of Economics, MIT Press, vol. 115(4), pages 1201-1237, November.
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