Working Paper: CEPR ID: DP10275
Authors: Ulrich Doraszelski; Jordi Jaumandreu
Abstract: Technological change can increase the productivity of the various factors of production in equal terms or it can be biased towards a specific factor. We develop an estimator for production functions when productivity is multi-dimensional. We directly assess the bias of technological change by measuring, at the level of the individual firm, how much of it is factor neutral and how much is labor augmenting. Applying our estimator to panel data from Spain, we find that technological change is indeed biased, with both its factor-neutral and its labor-augmenting component causing output to grow by about 2% per year.
Keywords: biased technological change; production function estimation; productivity
JEL Codes: D24; L60; O30
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| labor-augmenting technological change (O49) | output growth (O40) |
| Hicks-neutral technological change (O33) | output growth (O40) |
| R&D activities (O32) | productivity growth (O49) |
| productivity levels (O49) | productivity growth rates (O49) |