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Attila LINDNER (University College London) – "Technological Change and Skill Demand in Non-Competitive Labor Markets"

June 18, 2019 @ 12:15 pm - 1:30 pm
The Microeconometrics Seminar: Every Tuesday at 12:15 pm.
Time: 12:15 pm – 1:30 pm
Date: 18 th of June 2019
Place: Room 3001
Attila LINDNER (University College London) – “Technological Change and Skill Demand in Non-Competitive Labor Markets

Abstract: This paper investigates the consequences of technological change in the presence of non-competitive labor markets. We propose a model of technological progress where firms invest in innovation in the hope of developing new technologies. A successful innovation elevates rm-level labor demand, and so firms have to raise wages to hire more workers. Unlike in models where wages are set competitively, in this framework rm-level wage responses reveal information about the nature of technological change. We show that one can infer the extent which technological change is skill-biased by jointly investigating the effect of innovation on the rm-level skill ratio and on the skill wage premium. We apply this idea by exploiting unique firm-level innovation surveys linked to employee-employer data from Hungary and Norway. We show that firm-level technological change raises the skill ratio and also the skill premium in both countries. The increase in the skill-premium is not driven by the change in the composition of the workforce and, in line with the predictions of the non-competitive labor markets, wages of new entrants are also affected. Both high- (e.g. R&D based) and low-novelty value innovations are equally skill-biased. Among low-novelty innovation types, technological innovation is the most skill-biased, while organizational innovation is less so.


Laurent DAVEZIES (Laboratoire de Microéconométrie-CREST)
Benoît SCHMUTZ (Laboratoire de Microéconométrie-CREST)
Arne UHLENDORFF (Laboratoire de Microéconométrie-CREST)