Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/35558
Authors: 
Balleer, Almut
van Rens, Thijs
Year of Publication: 
2009
Series/Report no.: 
IZA Discussion Papers 4258
Abstract: 
Over the past two decades, technological progress has been biased towards making skilled labor more productive. What does skill-biased technological change imply for business cycles? To answer this question, we construct a quarterly series for the skill premium from the CPS and use it to identify skill-biased technology shocks in a VAR with long run restrictions. We find that hours worked fall in response to skill-biased, but not in response to skill-neutral improvements in technology. Skill-biased technology shocks are associated with increases in the relative price of investment, indicating that capital and skill are substitutes in aggregate production.
Subjects: 
Skill-biased technology
skill premium
VAR
long-run restrictions
capital-skill complementarity
business cycle
JEL: 
E24
E32
J24
J31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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