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New Goods and the Relative Demand for Skilled Labor

Chong Xiang

Purdue University West Lafayette

The Review of Economics and Statistics 2005

This paper provides data on the output and factor payments of new goods for every four-digit industry in the U.S. manufacturing sector in the late 1970s and 1980s. For the entire manufacturing sector, the new goods' average skilled-labor intensity exceeds the old goods' by over 40%, and new goods can account for approximately 30% of the increase in the relative demand for skilled labor. Because new goods provide a direct measure of technology, this paper offers new evidence that technology has shifted demand in favor of skilled labor, consistent with the technology skill-complementarity hypothesis.

DOI
10.1162/0034653053970393
Volume
87 (2)
Pages
285-298
Language
en
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