Soft and Hard Within- and Between-Industry Changes of U.S. Skill Intensity: Shedding Light on Worker's Inequality
January 2006
Working Paper Number:
CES-06-01
Abstract
In order to examine the worsening of inequality between workers of different skill levels over the past three decades and to further motivate the theoretical discussion on this issue, we use the decomposition methodology to focus on the interaction of within- and between-industry changes of the relative skill intensity in U.S. manufacturing. Unlike previous work, we use more detailed levels of industry classification (5-digit SIC product codes), and we analyze the impact of plants switching industries as well as of plant births and deaths on these changes. Internal, plant-level data from the U.S. Census Bureau's Longitudinal Research Database and the new Longitudinal Business Database provide us with the requisite information to conduct these studies. Finally, our empirical conclusions are discussed in relation to the inspired theoretical inference, as they enrich the debate concerning the sources of the inequality by justifying the skill-biased character of technical change.
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production,
econometric,
estimating,
manufacturing,
technology,
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technological,
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labor,
sector,
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employment changes,
industry employment,
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Annual Survey of Manufactures,
Longitudinal Research Database,
Organization for Economic Cooperation and Development,
Longitudinal Business Database,
World Bank,
Journal of Economic Literature,
Economic Census,
North American Industry Classification System,
Census Bureau Business Register
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