Working Paper: CEPR ID: DP12663
Authors: Zsofia Barany; Christian Siegel
Abstract: To study the drivers of the employment reallocation across sectors and occupations between 1960 and 2010 in the US we propose a model where technology evolves at the sector-occupation cell level. Since the framework does not a priori impose a specific form of technological change, it allows us to quantify the respective role of sector-specific and of occupation-specific technological change. We implement a novel method to extract changes in sector-occupation cell productivities from the data. Using a factor model we find that occupation and sectorfactors jointly explain 74-87 percent of cell productivity changes, with the occupation component being by far the most important. While in our general equilibrium model both factors imply similar reallocations of labor across sectors and occupations, quantitatively the bias in technological change across occupations is much more important than the bias across sectors.
Keywords: biased technological change; structural change; employment polarization
JEL Codes: O41; O33; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| sector factors (P23) | cell productivity changes (O49) |
| occupation factors (J29) | cell productivity changes (O49) |
| sector factors + occupation factors (J29) | cell productivity changes (O49) |
| occupation-specific changes (J62) | cell productivity changes (O49) |
| occupation factors (J29) | sector factors (P23) |
| policies targeting occupational choice (J68) | better labor market outcomes (J48) |