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Structural change and relative demand for skilled workers: new evidence from the US manufacturing

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  • Aekapol Chongvilaivan
  • Jung Hur

Abstract

The present paper empirically investigates the effects of structural change—change in labor productivity fueled by labor reallocation across industries—on relative demand for skilled workers, using the NBER-CES Manufacturing Industry Database for the period of 1958–2011. The measures unveil that the US manufacturing sectors had experienced dramatic structural change since the 1990s when labor was reallocated from high-productivity to low-productivity industries. Furthermore, we find the evidence that the growth-reducing structural change impinges positively on relative demand for skilled workers and is therefore another driving force of rising wage inequality, apart from high-tech capital investment and outsourcing activities, in the US manufacturing sectors.

Suggested Citation

  • Aekapol Chongvilaivan & Jung Hur, 2019. "Structural change and relative demand for skilled workers: new evidence from the US manufacturing," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 28(6), pages 1673-1696.
    • Handle: RePEc:oup:indcch:v:28:y:2019:i:6:p:1673-1696.
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    File URL: http://hdl.handle.net/10.1093/icc/dtz025
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    More about this item

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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