We study the origins of labor productivity growth and its differences across
sectors. In our model, sectors employ workers of different occupations and various
forms of capital, none of which are perfect substitutes, and technology evolves
at the sector-factor cell level. Using the model we infer technologies from US data
over 1960-2017. We find sector-specific routine labor augmenting technological
change to be crucial. It is the most important driver of sectoral differences, and
has a large and increasing contribution to aggregate labor productivity growth.
Neither capital accumulation nor the occupational employment structure within
sectors explains much of the sectoral differences. |
