Eprint first made available on ORBilu (E-prints, Working papers and Research blog)
Labor Market Effects of Technology Shocks biased Toward the Traded Sector
Bertinelli, Luisito; Cardi; Restout
2021
 

Files


Full Text
DP2021-15 Labor Market Effects of Technology Shocks Biased Toward the Traded Sector.pdf
Author preprint (4.98 MB)
Download

All documents in ORBilu are protected by a user license.

Send to



Details



Keywords :
Sector-biased technology shocks; Factor-augmenting effciency; Open economy
Abstract :
[en] Motivated by recent evidence pointing at an increasing contribution of asymmetric shocks across sectors to economic fluctuations, we explore the labor market effects of technology shocks biased toward the traded sector. Our VAR evidence for seventeen OECD countries reveals that the non-traded sector alone drives the increase in total hours worked following a technology shock that increases permanently traded relative to non-traded TFP. The shock generates a reallocation of labor toward the non-traded sector which contributes to 35% on average of the rise in non-traded hours worked. Both labor reallocation and variations in labor income shares are found empirically connected with factor-biased technological change. Our quantitative analysis shows that a two-sector open economy model with flexible prices can reproduce the labor market effects we document empirically once we allow for imperfect mobility of labor, gross substitutability between home- and foreign-produced traded goods, and factor-biased technological change. When calibrating the model to country-specific data, its ability to account for the cross-country reallocation and redistributive effects we estimate increases once we let factor-biased technological change vary between sectors and across countries.
Disciplines :
Macroeconomics & monetary economics
Author, co-author :
Bertinelli, Luisito ;  University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Department of Economics and Management (DEM)
Cardi
Restout
Language :
English
Title :
Labor Market Effects of Technology Shocks biased Toward the Traded Sector
Publication date :
October 2021
Available on ORBilu :
since 14 October 2021

Statistics


Number of views
228 (20 by Unilu)
Number of downloads
86 (0 by Unilu)

Bibliography


Similar publications



Contact ORBilu