ENDOGENOUS SKILL BIASED TECHNICAL CHANGE: TESTING FOR DEMAND PULL EFFECT

ENDOGENOUS SKILL BIASED TECHNICAL CHANGE: TESTING FOR DEMAND PULL EFFECT* Abstract In this article we use the unification of Germany in 1990 to test the hypothesis that an increase in the supply of a production factor generates skill biased technical change. We test for this mechanism in the context of the model presented by Acemoglu and Autor (2011) that allows endogenous assignment of skills to tasks in the economy. We use cohorts of workers from comparable countries as a control group. After discussing the possible confounding factors, we conclude that this effect is absent. The differential pattern among the countries seems to be determined by labor market flexibilization and tax reform. SESGO ENDÓGENO DEL CAMBIO TÉCNICO HACIA LAS CALIFICACIONES: TESTEANDO EL EFECTO DE JALÓN DE LA DEMANDA Resumen En este artículo usamos la unificación de Alemania en 1990 para probar la hipótesis de que un incremento en la oferta de un factor de producción genera cambio técnico sesgado hacia el trabajo calificado. Probamos este mecanismo en el contexto del modelo presentado por Acemoglu y Autor (2011) que contempla la asignación endógena entre calificaciones y tareas dentro de la economía. Utilizamos cohortes de trabajadores de países comparables como grupo de control. Después de discutir los posibles factores de confusión, se concluye que este efecto está ausente. El patrón diferencial entre los países parece estar determinada por la flexibilización del mercado laboral y la reforma fiscal. * A version of this article is forthcoming on Industrial and Corporate Change. We wish to thank our research assistants, T. van der Veen and Laura Jiménez and the GINI team. A special acknowledgement to G. Corneo, V. Maestri, B. Nolan, M. Piva, P. Vanin and M. Vivarelli for discussion, to all those who attended the GINI workshop in Amsterdam, and to the participants of seminars at AIAS (Amsterdam) and Frei Universiteit (Berlin). The authors acknowledge comments by two anonymous referees, whose suggestions have helped to improve the previous version of this paper. The usual disclaimer applies.