Working Paper: NBER ID: w1718
Authors: Ann P. Bartel; Frank R. Lichtenberg
Abstract: In this paper we estimate variants of a labor demand equation derived from a (restricted variable) cost function in which "experience"on a technology (proxied by the mean age of the capital stock) enters "non-neutrally." Our specification of the underlying cost function isbased on the hypothesis that highly educated workers have a comparative advantage with respect to the adjustment to and implementation of new technologies. Our empirical results are consistent with the implication of this hypothesis, that the relative demand for educated workers declines as the capital stock (and presumably the technology embodied therein) ages. According to our estimates, the education-distribution of employment depends more strongly on the age of equipment than on the age of plant, and the effect of changes in equipment age on labor demand is magnified in R&D-intensive industries.
Keywords: Education; Technology; Labor Demand; Innovation
JEL Codes: J24; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| experience with technology (L63) | labor demand (J23) |
| age of technology (O33) | relative demand for educated workers (J24) |
| age of equipment (L63) | education distribution of employment (D39) |
| equipment age (L68) | labor cost share of educated workers (J39) |
| equipment age * R&D intensity (O39) | labor demand (J23) |
| previous technology adoption (O33) | educational demand (I21) |