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Shifts and twists in the relative productivity of skilled labor

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  • Dupuy, A.

    (Research Centre for Educ and Labour Mark)

  • Marey, P.S.

    (Research Centre for Educ and Labour Mark)

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 (1978) [Rosen, S., 1978. Substitution and the division of labor. Economica 45, 235-250] 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 1970s followed by an increase at the beginning of the 1990s. This pattern of the elasticity of substitution has contributed to the labor productivity slowdown in the mid-1970s through the 1980s and to a speedup in the 1990s.
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Suggested Citation

  • Dupuy, A. & Marey, P.S., 2005. "Shifts and twists in the relative productivity of skilled labor," ROA Research Memorandum 9E, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  • Handle: RePEc:unm:umaror:20059e
    DOI: 10.26481/umaror.200509E
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    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, Ad libros publications inc., 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, Ad libros publications inc., vol. 17(3-4), pages 12-36, September.
    6. Havranek, Tomas & Irsova, Zuzana & Laslopova, Lubica & Zeynalova, Olesia, 2020. "Skilled and Unskilled Labor Are Less Substitutable than Commonly Thought," EconStor Preprints 223060, ZBW - Leibniz Information Centre for Economics.
    7. Dohmen, T.J. & Falk, A. & Huffman, D. & Marklein, F. & Sunde, U., 2008. "Biased probability judgment: representative evidence for pervasiveness and economic outcomes," ROA Research Memorandum 009, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    8. Havranek, Tomas & Irsova, Zuzana & Laslopova, Lubica & Zeynalova, Olesia, 2020. "The Elasticity of Substitution between Skilled and Unskilled Labor: A Meta-Analysis," MPRA Paper 102598, University Library of Munich, Germany.
    9. 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.
    10. Bas Straathof, 2006. "Schooling inequality and the rise of research," CPB Discussion Paper 74.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    11. 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, Ad libros publications inc., vol. 17(3-4), pages 37-70, September.

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    More about this item

    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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