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Shifts and Twists in the Relative Productivity of Skilled Labor

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  • Dupuy Arnaud
  • Marey Philip

    (ROA rm)

Abstract

Skill-biased technical change is usually interpreted in terms of the efficiency parameters of skilled and unskilled labor. This implies that the relative productivity of skilled workers changes proportionally in all tasks. In contrast, we argue that technical changes also affect the curvature of the distribution of relative productivity. Building on Rosen''s (1978) tasks assignment model, this implies that not only the efficiency parameters of skilled and unskilled workers change, but also the elasticity of substitution between skill-types of labor. Using data for the United States between 1963 and 2002, we find significant empirical support for a decrease in the elasticity of substitution at the end of the 70s followed by an increase at the beginning of the 90s. This pattern of the elasticity of substitution has contributed to the labor productivity slowdown in the mid 70s through the 80s and to a speedup in the 90s.

Suggested Citation

  • Dupuy Arnaud & Marey Philip, 2005. "Shifts and Twists in the Relative Productivity of Skilled Labor," ROA Research Memorandum 007, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  • Handle: RePEc:unm:umaror:2005007
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    Cited by:

    1. Bas Straathof, 2005. "Schooling inequality and the rise of research," DEGIT Conference Papers c010_012, DEGIT, Dynamics, Economic Growth, and International Trade.
    2. Cörvers, Frank & Dupuy, Arnaud, 2010. "Estimating employment dynamics across occupations and sectors of industry," Journal of Macroeconomics, Elsevier, pages 17-27.
    3. Arnaud Dupuy & Todd Sorensen, 2014. "On Input Market Frictions and Estimation of Factors' Demand," Southern Economic Journal, Southern Economic Association, vol. 80(3), pages 772-781, January.
    4. Lex Borghans & Bas ter Weel, 2008. "Understanding the Technology of Computer Technology Diffusion: Explaining Computer Adoption Patterns and Implications for the Wage Structure," Journal of Income Distribution, Journal of Income Distribution, vol. 17(3-4), pages 37-70, September.
    5. Arnaud Dupuy, 2008. "The Assignment of Workers to Tasks, Wage Distribution, and Technical Change: A Critical Review," Journal of Income Distribution, Journal of Income Distribution, vol. 17(3-4), pages 12-36, September.
    6. Carmen Cristina Albu, 2012. "Valences Of The Diagnosis And Identification Methods Of The Cultural Phenomenon In Romanian Tourism Agencies," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 3(40), pages 147-158.

    More about this item

    Keywords

    education; training and the labour market;

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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