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New Goods and the Relative Demand for Skilled Labor

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  • Chong Xiang

    (Purdue University)

Abstract

This paper provides data on the output and factor payments of new goods for every four-digit industry in the U.S. manufacturing sector in the late 1970s and 1980s. For the entire manufacturing sector, the new goods' average skilled-labor intensity exceeds the old goods' by over 40%, and new goods can account for approximately 30% of the increase in the relative demand for skilled labor. Because new goods provide a direct measure of technology, this paper offers new evidence that technology has shifted demand in favor of skilled labor, consistent with the technology skill-complementarity hypothesis. © 2005 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Chong Xiang, 2005. "New Goods and the Relative Demand for Skilled Labor," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 285-298, May.
    • Handle: RePEc:tpr:restat:v:87:y:2005:i:2:p:285-298
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    Citations

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    Cited by:

    1. Ariell Reshef, 2013. "Is Technological Change Biased Towards the Unskilled in Services? An Empirical Investigation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(2), pages 312-331, April.
    2. Colantone, Italo & Crinò, Rosario, 2014. "New imported inputs, new domestic products," Journal of International Economics, Elsevier, vol. 92(1), pages 147-165.
    3. Guy Michaels, 2011. "The Long Term Consequences of Resource‐Based Specialisation," Economic Journal, Royal Economic Society, vol. 121(551), pages 31-57, March.
    4. Tibor Besedes & Thomas Prusa, 2006. "Ins, outs, and the duration of trade," Canadian Journal of Economics, Canadian Economics Association, vol. 39(1), pages 266-295, February.
    5. Italo Colantone & Alessia Matano & Paolo Naticchioni, 2020. "New imported inputs, wages and worker mobility," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 29(2), pages 423-457.
    6. Chen, Xiaoping & Lu, Yi & Zhu, Lianming, 2017. "Product cycle, contractibility, and global sourcing," Journal of Development Economics, Elsevier, vol. 127(C), pages 283-296.
    7. François Lafond & Daniel Kim, 2019. "Long-run dynamics of the U.S. patent classification system," Journal of Evolutionary Economics, Springer, vol. 29(2), pages 631-664, April.
    8. Xiang, Chong, 2007. "New goods and the skill premium," Journal of International Economics, Elsevier, vol. 71(1), pages 133-147, March.
    9. Debaere, Peter & Mostashari, Shalah, 2010. "Do tariffs matter for the extensive margin of international trade? An empirical analysis," Journal of International Economics, Elsevier, vol. 81(2), pages 163-169, July.
    10. Lundin, Nannan & Sjöholm, Fredrik & Ping, He & Qian, Jinchang, 2007. "Technology Development and Job Creation in China," Working Paper Series 697, Research Institute of Industrial Economics.
    11. Michaels, Guy, 2006. "The Long-Term Consequences of Regional Specialization," CEPR Discussion Papers 6028, C.E.P.R. Discussion Papers.
    12. James Harrigan & Ariell Reshef, 2015. "Skill‐biased heterogeneous firms, trade liberalization and the skill premium," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(3), pages 1024-1066, August.
    13. Cong S. Pham & Mehmet Ali Ulubaşoğlu, 2016. "The role of endowments, technology and size in international trade: new evidence from product-level data," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(7), pages 913-937, October.
    14. Joseph K. Kaboski, 2009. "Education, Sectoral Composition and Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 168-182, January.
    15. Chiswick, Barry R., 2011. "Immigration: High Skilled vs. Low Skilled Labor?," IZA Policy Papers 28, Institute of Labor Economics (IZA).
    16. Vasilios D. Kosteas, 2017. "Workers’ Participation in Training and Import Competition: Evidence from the USA," The World Economy, Wiley Blackwell, vol. 40(6), pages 1089-1104, June.
    17. Nam, Choong Hyun, 2014. "The role of product diversification in skill-biased technological change," MPRA Paper 61029, University Library of Munich, Germany.
    18. Unjung Whang, 2014. "Who Exports Better Quality Products to Smaller or More Distant Markets?," Review of International Economics, Wiley Blackwell, vol. 22(3), pages 578-598, August.

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