The Impact of Computer Capital on the Demand for Heterogeneous Labor

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 25.02.2003, 12:15 - 13:30


Presentation by 

Bertrand Koebel (Louis Pasteur University Strasbourg)


In this paper, a system of static and dynamic factor demand equations based on a variant of the generalized Box-Cox cost function nesting the translog, the generalized Leontief and the normalized quadratic functional form is derived and estimated. OCM capital and general capital are treated as quasi-fixed factors. Using panel data on 35 German industries, we find that OCM capital is complementary to all skill levels. In nonmanufacturing industries, we find that an increase in general capital tends to reduce unskilled workers. Wage effects and substitution effects between different types of labor and material inputs play a minor role in explaining employment changes of highly skilled workers and medium-skilled workers but these effects are more important in explaining the demand for unskilled workers.

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