lecture-13 slide ringkas

7/23/2019 Lecture-13 Slide Ringkas

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Lecture 13

Skills, tasks & technologies

Main reference: Acemoglu & Autor,

Handbook of Labor Economics, vol 4


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Canonical model

Two skill groups: high skill & low skill

Skill groups imperfect substitutes inproduction

Technology factor augmenting, complementseither high-skill or low skill workers

Wage differences (and return to education)depend on changes in relative supply and

speed of technological change (race betweeneducation and technology)


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Canonical model, implications

Changes in supply affect relative wages

Skill-biased technological change increases

relative productivity of high skill workers and

increases wage differences across groups

Increase in productivity of one group will

increase wages in all groups


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Goldin & Katz

Canonical model provides a good account for

changes in return to schooling and demand

for skills in the US

Increase in return to education partly due toless rapid expansion of education after 1980s

and partly to increased speed of technological

change


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Acemoglu & Autor

Canonical model not sufficient

No role for tasks

Some core tasks have become easy to offshore

This can lead to polarization in the labor market if the

offshored tasks previously performed by middle skill workers

Technological change is not exogeneous and not

necessarily skill-biased

Goldin & Katz : 19th century tech change skill substituting

Acemoglu: Technology endogenous response to labormarket changes


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Acemoglu & Autor

Canonical model hard to fit with facts

Does not explain the decline in real wages of low-

skill worker groups despite of falling supply

Does not explain polarization in the labor market

Cannot explain why occupations have become

more important or why occupational structure has

changed

No role for outsourcing or task replacingtechnologies (computers)


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Application for Finland, Mitrunen 2013


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Changes in occupational structutre,

Data source: palkkarakennetilasto


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Acemoglu & Autor

Three skill-groups: low, middle & high

Continium of tasks, ordered by complexity (i)

High skill workers have a relative advantage in morecomplex tasks

In equilibrium tasks iIH

performed by high skill group and remainingintermediate tasks by middle-skill group

Law of one price: workers of same skill group receivesame pay in all tasks

IH determined so that costs of performing task

IHissame with high vs. middle skill labor. Similarly for I

L


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Implications

Increase in supply of high skills (or increase ineffective supply due to productivity increase)

Reduces IHi.e. increases the range of tasks

performed by high skill workers Creates an excess supply of middle skill

workrers, and therefore reduces ILinducing

firms to substitute middle skill workers totasks previously performed by low skillworkers


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Implications 2: task replacing

technologies

Technological change can replace some tasks

previously produced by certain worker group

by machines

This reduces the wage of the skill group

And widens the range of tasks performed by this

group

lecture-13 slide ringkas

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