Sang Yoon (Tim) Lee, Toulouse School of Economics: Horizontal and Vertical Polarization: Task-Specific Technological Change in a Multi-Sector Economy
ESOP seminar. Sang Yoon (Tim) Lee is Assistant Professor of Economics at Toulouse School of Economics. He will present the paper "Task-Specific Technological Change in a Multi-Sector Economy", written jointly with Yongseok Shin.
Sang Yoon (Tim) Lee. Photo: University of Mannheim.
We develop a novel framework that integrates an economy's skill distribution with its occupational and industrial structure. Individuals become a manager or a worker based on their managerial vs. worker skills, and workers further sort into a continuum of occupations ranked by skill content. Our theory dictates that faster technological progress for middle-skill worker tasks not only raises the employment shares and relative wages of lower- and higher-skill worker occupations (horizontal polarization), but also raises those of managers over workers as a whole (vertical polarization). Both dimensions of polarization are faster within sectors that depend more on middle-skill tasks. The TFP of such sectors grows faster endogenously, and, with complementarity across sectoral goods, their employment and value-added shares decrease. In the limiting growth path, middle-skill occupations vanish but all sectors coexist. Our quantitative analysis of the U.S. economy, utilizing several novel facts, shows that task-specific technological progress which was fastest for occupations that embody routine-manual tasks but not interpersonal skills|is important for understanding the changes in its sectoral, occupational, and organizational structure since 1980.
Host: Hans Holter