Lindner, Attila, Muraközy, Balázs, Reizer, Balázs and Schreiner, Ragnhild (2022) Firm-level technological change and skill demand. CEP Discussion Papers (CEPDP1857). London School of Economics and Political Science. Centre for Economic Performance, London, UK.
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Abstract
We quantify the contribution of firm-level technological change to skill demand and aggregate inequality in the presence of imperfect competition in the labor market. We show that skill-biased technological change increases both the firm-level skill ratio and the skill premium, while other shocks (e.g. firm-specific output demand shocks) cannot explain the increase in both outcomes. We exploit administrative data and a large survey measuring a broad class of firm-level technological changes from Hungary and Norway. We estimate that the aggregate college premium increases by 6.1% in Norway and by 13.8% in Hungary as a result of the skill bias in technological change
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