Work

Skill-Biased Technological Change and the Business Cycle

Year: 2012

Type: article

Abstract: Over the past two decades, technological progress in the United States has been biased toward skilled labor. What does this imply for business cycles? We construct a quarterly skill premium from the CPS and use it to identify skill-biased technology shocks in a VAR with long-run zero and sign restrictions. Hours fall in response to skill-biased technology shocks, indicating that part of the technology-induced fall in hours is due to a compositional shift in labor demand. Investment-specific technology shocks reduce the skill premium, indicating that capital and skill are not complementary in aggregate production.

Source: The Review of Economics and Statistics

DOI: 10.1162/rest_a_00326

Authors: Almut Balleer, Thijs van Rens

Institutions: RWTH Aachen University, University of Warwick, Centre for Economic Policy Research

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: green

Funders: Generalitat de Catalunya, Departament d'Innovació, Universitats i Empresa, Generalitat de Catalunya, Economic and Social Research Council