Working Paper No. 518

The Multi-Dimensional Nature of Labor Demand and Skill-Biased Technical Change

Published: August 19,1999. Revised December 8, 1999.Pages: 65Keywords: Robustness Test, Labor Quality, Heterogeneous Low-Skilled, Manufacturing ApplicationJEL-codes: J23, O33, D21, J31, L60

The Multi-Dimensional Nature of Labor Demand and Skill-Biased Technical Change Erik Mellander


Investigating the robustness of the skill-biased technical change hypothesis, this analysis incorporates two novel features. First, effective labor is modeled as the product of a quantity measure - number of employees with a given level of education - and a quality index, depending on, i.a., demographic characteristics and fields-of-study. Second, low-skilled labor is more disaggregated than in earlier studies. A fully specified structural model is used, containing demand equations for four categories of labor, two types of capital and intermediate goods. The empirical application covers 24 industries in the Swedish manufacturing sector 1985 - 1995. The skill-bias is further corroborated: it is confirmed although the specification of effective labor is supported. Substantial differences are, however, found among the low-skilled.

Interdisciplinary European Studies

The European Union and the Return of the Nation State

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This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

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