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Occupational Exposure to Capital-Embodied Technical Change

Resource type
Authors/contributors
Title
Occupational Exposure to Capital-Embodied Technical Change
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.
Publication
American Economic Review
Volume
113
Issue
6
Pages
1642-85
Date
2023-06
Citation
Caunedo, J., Jaume, D., & Keller, E. (2023). Occupational Exposure to Capital-Embodied Technical Change. American Economic Review, 113, 1642–1685.
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