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The Multi-Dimensional Nature of Labor Demand and Skill-Biased Technical Change

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    Investigating the robustness of the skill-biased technical change hypothesis, this analysis incorporates two novel features. First, effective labor is modeled as the product of a quantity measure - number of employees with a given level of education - and a quality index, depending on, i.a., demographic characteristics and fields-of-study. Second, low-skilled labor is more disaggregated than in earlier studies. A fully specified structural model is used, containing demand equations for four categories of labor, two types of capital and intermediate goods. The empirical application covers 24 industries in the Swedish manufacturing sector 1985-1995. The skill-bias is further corroborated: it is confirmed although the specification of effective labor is supported. Substantial differences are, however, found among the low-skilled.

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    Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 518.

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    Length: 64 pages
    Date of creation: 19 Aug 1999
    Date of revision: 08 Dec 1999
    Handle: RePEc:hhs:iuiwop:0518
    Contact details of provider: Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
    Phone: +46 8 665 4500
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