JVM Seminar: Zsofia Barany (Sciences Po)

Feb 21, 2017, 17:00 - 18:30, IHS, Seminar Room 101

Disentangling occupation- and sector-specific technological change

Zsofia Barany (Sciences Po)

The labor markets of most developed countries have experienced substantial changes in terms of both sectoral and occupational outcomes in recent decades. The large overlap between these outcomes allow the basic labor market patterns to be explained by either sector- or occupation-specific technological change. Yet distinguishing these two potential drivers is important as their implications differ for certain outcomes and for evaluating policies. In this paper we use a parsimonious model to extract sector-occupation specific technological change from the data. Using a factor model we decompose these changes into sector only and occupation only components, and show that both play a role. Finally we use our model to generate counterfactual series to gauge the importance of sector specific and occupation specific technological change on relative wages, sectoral value added shares and sector-occupation employment shares.