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Technological Change in Quantities

Author

Listed:
  • Eeckhout, Jan

    (University of Pompeu Fabra)

  • Kircher, Philipp

    (Université catholique de Louvain, LIDAM/CORE, Belgium)

  • Lafuente, Cristina

    (University of Bath)

Abstract

Skill-biased technological change has long been linked to rising wage inequality. New technologies also allow firms to expand their scope of their operation. We formalize such quantity-biased technological change and calibrate the model to German matched employeremployee data. The calibration attributes substantial changes in the firm size distribution and in wages to this channel. Quantity-biased technological change spreads out the firm size distribution with a moderating influence on wage inequality within blue and white collar occupations, yet it increases inequality between these occupations. The quantity-bias component in the blue collar occupations alone moderates inequality within and between occupations.

Suggested Citation

  • Eeckhout, Jan & Kircher, Philipp & Lafuente, Cristina, 2024. "Technological Change in Quantities," LIDAM Discussion Papers CORE 2024017, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2024017
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    More about this item

    Keywords

    Quantity-bias ; scale-bias ; technological change ; skill-bias ; firm size distribution ; wage inequality;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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