“Soft and Hard Within- and Between-Industry Changes of US Skill Intensity: Shedding light on worker’s inequality”

“Soft and Hard Within- and Between-Industry Changes of US Skill Intensity: Shedding light on worker’s inequality” (Co-author: Lynn Riggs)

U.S. Census Bureau – Center for Economic Studies – Discussion Paper CES-06-01, January 2006

08/2006 – 33rd Conference of the European Association for Research in Industrial Economics – Amsterdam

09/2005 – European Trade Study Group 2005 – Dublin

Abstract: In order to examine the worsening of inequality between workers of different skill levels over the past three decades and to further motivate the theoretical discussion on this issue, we use the decomposition methodology to focus on the interaction of within- and between-industry changes of the relative skill intensity in U.S. manufacturing. Unlike previous work, we use more detailed levels of industry classification (5-digit SIC product codes), and we analyze the impact of plants switching industries as well as of plant births and deaths on these changes. Internal, plant-level data from the U.S. Census Bureau’s Longitudinal Research Database and the new Longitudinal Business Database provide us with the requisite information to conduct these studies. Finally, our empirical conclusions are discussed in relation to the inspired theoretical inference, as they enrich the debate concerning the sources of the inequality by justifying the skill-biased character of technical change.

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