American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Occupational Exposure to Capital-Embodied Technical Change
American Economic Review
vol. 113,
no. 6, June 2023
(pp. 1642–85)
Abstract
We study differences in exposure to factor-biased technical change among occupations by providing the first measures of capital-embodied technical change (CETC) and of the elasticity of substitution between capital and labor at the occupational level. We document sizable occupational heterogeneity in both measures, but quantitatively, it is the heterogeneity in factor substitutability that fuels workers' exposure to CETC. In a general equilibrium model of worker sorting across occupations, CETC accounts for almost all of the observed labor reallocation in the US between 1984 and 2015. Absent occupational heterogeneity in factor substitutability, CETC accounts for only 17 percent of it.Citation
Caunedo, Julieta, David Jaume, and Elisa Keller. 2023. "Occupational Exposure to Capital-Embodied Technical Change." American Economic Review, 113 (6): 1642–85. DOI: 10.1257/aer.20211478Additional Materials
JEL Classification
- I26 Returns to Education
- J16 Economics of Gender; Non-labor Discrimination
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 Wage Level and Structure; Wage Differentials
- O33 Technological Change: Choices and Consequences; Diffusion Processes