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The role of product diversification in skill-biased technological change

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  • Nam, Choong Hyun

Abstract

Since the 1980s, the labour demand has shifted toward more educated workers in the US. The most common explanation is that the productivity of skilled workers has risen relative to the unskilled, but it is not easy to explain why the aggregate labour productivity was stagnant during the 1980s. Alternatively, I have constructed a theoretical model which assumes that the demand for white-collar workers increases not because their productivity grows faster, but because increasing product variety requires white-collar workers as fixed input. Hence, the transition from Ford-style mass production towards more diversified one has shifted labour demand toward white-collar workers.

Suggested Citation

  • Nam, Choong Hyun, 2014. "The role of product diversification in skill-biased technological change," MPRA Paper 61029, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:61029
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    More about this item

    Keywords

    Skill Demand; product innovation; inequality; productivity;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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