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Capital-Skill Complementarity: Does capital disaggregation matter?

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  • Correa, Juan
  • Lorca, Miguel
  • Parro, Francisco

Abstract

Using Chilean manufacturing plants data, we�find: (1) the elasticity of substitution between capital and skilled labor is lower than the elasticity of substitution between capital and unskilled labor, and (2) the higher the technological component of the capital stock the larger the size of complementarity between capital and skilled labor. Our�findings show that capital, as an aggregate input, may under(over) state the complementarity between labor and the type of capital these workers actually use.

Suggested Citation

  • Correa, Juan & Lorca, Miguel & Parro, Francisco, 2014. "Capital-Skill Complementarity: Does capital disaggregation matter?," MPRA Paper 61285, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:61285
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    References listed on IDEAS

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    Cited by:

    1. Francisco Parro & Loreto Reyes, 2017. "The rise and fall of income inequality in Chile," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 26(1), pages 1-31, December.
    2. Parro, Francisco & Reyes, Loreto, 2013. "The Chilean Labor Market: Job Creation, Quality, Inclusiveness, and Future Challenges," MPRA Paper 50755, University Library of Munich, Germany.

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    More about this item

    Keywords

    capital-skill complementarity; technological capital; translog function;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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