Technological Change in Quantities

Eeckhout, Jan;Kircher, Philipp;Lafuente, Cristina
(2024) , 43 pages

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  • Eeckhout, JanUniversity of Pompeu Fabra
    Author
  • Kircher, PhilippUCLouvain
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  • Lafuente, CristinaUniversity of Bath
    Author
Abstract
Skill-biased technological change has long been linked to rising wage inequality. New technologies also allow firms to expand their scope of their operation. We formalize such quantity-biased technological change and calibrate the model to German matched employeremployee data. The calibration attributes substantial changes in the firm size distribution and in wages to this channel. Quantity-biased technological change spreads out the firm size distribution with a moderating influence on wage inequality within blue and white collar occupations, yet it increases inequality between these occupations. The quantity-bias component in the blue collar occupations alone moderates inequality within and between occupations.
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Eeckhout, J., Kircher, P., & Lafuente, C. (2024). Technological Change in Quantities (LIDAM Discussion Paper CORE 2024/17). https://hdl.handle.net/2078.5/275069