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New Technologies And The Demand For Heterogeneous Labor: Firm-Level Evidence For The German Business-Related Service Sector

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  • Ulrich Kaiser

Abstract

This paper investigates the impact of modern information and communication technologies on the demand for heterogeneous labor. It starts with an interrelated factor demand system. The 'desired' level of employment which is needed in such models, is derived from a Generalized Leontief cost function with quasi-fixed factors. Firm-level, cross-sectional data taken from an innovation survey in the service sector are used in the empirical analysis. The model is estimated by a trivariate ordered probit model. Evidence in favor of skill-biased technological change in the fast-growing German business-related services sector is found. 'Ibe paper suggests a new method of calculating skill-specific and firm-specific labor cost from information on total labor cost and the share of each skill group in total employment only.

Suggested Citation

  • Ulrich Kaiser, 2000. "New Technologies And The Demand For Heterogeneous Labor: Firm-Level Evidence For The German Business-Related Service Sector," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(5), pages 465-486.
  • Handle: RePEc:taf:ecinnt:v:9:y:2000:i:5:p:465-486
    DOI: 10.1080/10438590000000019
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    References listed on IDEAS

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    3. Klodt, Henning & Maurer, Rainer & Schimmelpfennig, Axel, 1997. "Tertiarisierung in der deutschen Wirtschaft," Open Access Publications from Kiel Institute for the World Economy 959, Kiel Institute for the World Economy (IfW).
    4. M. Ishaq Nadiri & Sherwin Rosen, 1973. "Appendices to "A Disequilibrium Model of Demand for Factors of Production"," NBER Chapters,in: A Disequilibrium Model of Demand for Factors of Production, pages 175-200 National Bureau of Economic Research, Inc.
    5. Bean, Charles R, 1994. "European Unemployment: A Survey," Journal of Economic Literature, American Economic Association, vol. 32(2), pages 573-619, June.
    6. Eli Berman & John Bound & Zvi Griliches, 1994. "Changes in the Demand for Skilled Labor within U. S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 367-397.
    7. Brouwer, Erik & Kleinknecht, Alfred & Reijnen, Jeroen O N, 1993. "Employment Growth and Innovation at the Firm Level," Journal of Evolutionary Economics, Springer, vol. 3(2), pages 153-159, May.
    8. M. Ishaq Nadiri & Sherwin Rosen, 1973. "Introduction to "A Disequilibrium Model of Demand for Factors of Production"," NBER Chapters,in: A Disequilibrium Model of Demand for Factors of Production, pages -7--3 National Bureau of Economic Research, Inc.
    9. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    10. Stephen Machin & John Van Reenen, 1998. "Technology and Changes in Skill Structure: Evidence from Seven OECD Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 113(4), pages 1215-1244.
    11. Diewert, W E, 1971. "An Application of the Shephard Duality Theorem: A Generalized Leontief Production Function," Journal of Political Economy, University of Chicago Press, vol. 79(3), pages 481-507, May-June.
    12. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February.
    13. Julian R. Betts, 1997. "The Skill Bias Of Technological Change In Canadian Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 146-150, February.
    14. Daniel S. Hamermesh, 1993. "Labor Demand and the Source of Adjustment Costs," NBER Working Papers 4394, National Bureau of Economic Research, Inc.
    15. Sanjeev Dewan & Chung-ki Min, 1997. "The Substitution of Information Technology for Other Factors of Production: A Firm Level Analysis," Management Science, INFORMS, vol. 43(12), pages 1660-1675, December.
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    Citations

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    Cited by:

    1. Fitzenberger, Bernd & Hübler, Olaf & Kraft, Kornelius, 2008. "Flexibilisierungspotenziale bei heterogenen Arbeitsmärkten : eine Einführung (Potentials for increasing flexibility in heterogeneous labour markets : an introduction)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 95-116.
    2. Thomas Ziesemer, 2003. "Information and Communication Technology as Technical Change in Matching and Production," Journal of Economics, Springer, vol. 79(3), pages 263-287, July.
    3. repec:iab:iabzaf:v:41:i:2/3:p:95-116 is not listed on IDEAS
    4. Beckmann, Michael, 2000. "Unternehmenspolitik, Managerkontrolle und Personalabbau in Deutschland : theoretische Ansätze und empirische Analyse mit Daten des IAB-Betriebspanels (Corporate policy, manager control and staff reduc," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 33(4), pages 594-608.
    5. Spitz, Alexandra, 2004. "Are Skill Requirements in the Workplace Rising? Stylized Facts and Evidence on Skill-Biased Technological Change," ZEW Discussion Papers 04-33, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    6. Piva, Mariacristina & Santarelli, Enrico & Vivarelli, Marco, 2005. "The skill bias effect of technological and organisational change: Evidence and policy implications," Research Policy, Elsevier, vol. 34(2), pages 141-157, March.
    7. Kaiser Ulrich, 2000. "A Note on the Calculation of Firm-specific and Skill-specific Labor Costs from Firm-level Data / Zur Berechnung von qualifikations- und firmenspezifischen Arbeitskosten auf der Grundlage von Firmendat," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 220(5), pages 541-551, October.
    8. repec:bla:ecopol:v:29:y:2017:i:3:p:209-236 is not listed on IDEAS
    9. Falk, Martin, 2001. "Diffusion of information technology, internet use and the demand of heterogeneous labor," ZEW Discussion Papers 01-48, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    10. Franz, Wolfgang, 1999. "Real and monetary challenges to wage policy in Germany at the turn of the millennium: technical progress, globalization and European Monetary Union," ZEW Discussion Papers 99-48, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    11. Jacobi, Lena & Schaffner, Sandra, 2008. "Does Marginal Employment Substitute Regular Employment? – A Heterogeneous Dynamic Labor Demand Approach for Germany," Ruhr Economic Papers 56, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    12. Falk, Martin, 2001. "Organizational change, new information and communication technologies and the demand for labor in services," ZEW Discussion Papers 01-25, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    13. Peters, Bettina, 2004. "Employment Effects of Different Innovation Activities: Microeconometric Evidence," ZEW Discussion Papers 04-73, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    14. Falk, Martin, 2002. "Diffusion der Informations- und Kommunikationstechnologien und die Qualifikationsstruktur der Arbeitskräfte (Diffusion of information and communication technology and the qualification structure of th," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 35(3), pages 397-410.
    15. Accinelli, Elvio & Sanchez Carrera, Edgar J., 2011. "Strategic complementarities between innovative firms and skilled workers: The poverty trap and the policymaker's intervention," Structural Change and Economic Dynamics, Elsevier, vol. 22(1), pages 30-40, February.
    16. repec:zbw:rwirep:0056 is not listed on IDEAS
    17. Mughal, Mazhar & Diawara, Barassou, 2011. "Human capital and the adoption of information and communications technologies: Evidence from investment climate survey of Pakistan," Economics Discussion Papers 2011-21, Kiel Institute for the World Economy (IfW).
    18. Lena Jacobi & Sandra Schaffner, 2008. "Does Marginal Employment Substitute Regular Employment? – A Heterogeneous Dynamic Labor Demand Approach for Germany," Ruhr Economic Papers 0056, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    19. Hollenstein, Heinz, 2004. "Determinants of the adoption of Information and Communication Technologies (ICT): An empirical analysis based on firm-level data for the Swiss business sector," Structural Change and Economic Dynamics, Elsevier, vol. 15(3), pages 315-342, September.
    20. repec:iab:iabmit:v:35:i:3:p:397-410 is not listed on IDEAS
    21. repec:iab:iabmit:v:33:i:4:p:594-608 is not listed on IDEAS
    22. Hanan Nazier, 2017. "Estimating Labor Demand Elasticities and Elasticities of Substitution in Egyptian Manufacturing Sector: A Firm Level Static Analysis," Working Papers 1158, Economic Research Forum, revised 11 2017.

    More about this item

    Keywords

    interrelated factor demands; Generalized Leontief cost function; heterogeneous labor demand; business-related services; labor cost decomposition; aivariate ordad probit model;

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services

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