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Disentangling Occupation- and Sector-specific Technological Change

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  • Barany, Zsofia
  • Siegel, Christian

Abstract

To study the drivers of the employment reallocation across sectors and occupations between 1960 and 2010 in the US we propose a model where technology evolves at the sector-occupation cell level. Since the framework does not a priori impose a specific form of technological change, it allows us to quantify the respective role of sector-specific and of occupation-specific technological change. We implement a novel method to extract changes in sector-occupation cell productivities from the data. Using a factor model we find that occupation and sector factors jointly explain 74-87 percent of cell productivity changes, with the occupation component being by far the most important. While in our general equilibrium model both factors imply similar reallocations of labor across sectors and occupations, quantitatively the bias in technological change across occupations is much more important than the bias across sectors.

Suggested Citation

  • Barany, Zsofia & Siegel, Christian, 2018. "Disentangling Occupation- and Sector-specific Technological Change," CEPR Discussion Papers 12663, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:12663
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    References listed on IDEAS

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    More about this item

    Keywords

    biased technological change; employment polarization; structural change;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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