Skill Complementarity in Production Technology: New Empirical Evidence and Implications

Arbeitspapier

Matched worker-firm data from Danish manufacturing reveal that 1) industries differ in within-firm worker skill dispersion, and 2) the correlation between within-firm skill dispersion and productivity is positive in industries with higher average skill dispersion. We argue that these patterns are a manifestation of technological differences across industries: firms in the "skill complementarity" industries profit from hiring workers of similar skill level, whereas firms in the "skill substitutability" industries benefit from hiring workers of different skill levels. An empirical method we devise produces a robust classification of industries into the distinct complementarity and substitutability groups. Our study unveils hitherto unnoticed technological heterogeneity between industries within the same economy, and demonstrates its importance. Specifically, we show through simulations on a simple general equilibrium model that failing to take technological heterogeneity into account results in large prediction errors.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 12433

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity ; Computable and Other Applied General Equilibrium Models
• Thema: skill dispersion ; complementarity ; production technology ; firm productivity

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Stoyanov, Andrey ; Zubanov, Nick
• Ereignis: Veröffentlichung
• (wer): Institute of Labor Economics (IZA)
• (wo): Bonn
• (wann): 2019

Weitere Informationen

• Handle: http://hdl.handle.net/10419/202779
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ