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The Role of Technology in Determining Skilled Employment: An Economywide Approach

Staff research paper

This paper by Patrick Laplagne, Peter Marshall and Susan Stone was released on 28 August 2001. The paper investigates the shift in demand toward skilled workers in an economywide framework, and compares the role of skill biased technological change with that of trade in explaining the increased demand for skilled workers.

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Over the past twenty years, there has been a shift toward employment of skilled workers in Australia, as well as in many other industrialised economies.

A staff research paper by Patrick Laplagne, Peter Marshall and Susan Stone on The Role of Technology in Determining Skilled Employment: An Economywide Approach compares the role of technological change with that of trade in explaining the increased demand for skilled workers.

The paper shows technology has played the dominant role in changing employment patterns in Australia. This finding is consistent across industries, including those having experienced increased import competition. Rising capital intensity of production has also promoted the employment of more highly skilled workers.

Background Information

Leonora Nicol (Media, Publications and Web) 02 6240 3239 / 0417 665 443

Preliminaries
Cover, Copyright, Contents, Acknowledgements, Key Messages, Overview

1 Introduction
1.1 Gaps in existing evidence
1.2 Benefits of general equilibrium analysis

2 Background and method
2.1 Model
2.2 Method

3 Decomposing the effects of technology
3.1 Outcomes of the historical simulation
3.2 Change in the relative employment of skilled labour; outcomes of the decomposition simulation

4 Industry outcomes
4.1 Industry outcomes
4.2 Summary

5 Summary of findings
5.1 Summary
5.2 Future research

A Historical and decomposition simulations with MONASH
A.1 Historical and decomposition modes of MONASH

B Sector wage and employment data
B.1 Data sources
B.2 Industry concordance
B.3 Relative employment and relative wage calculations
B.4 MONASH industry and sector classification

C Functional form
C.1 Introduction
C.2 Translog
C.3 Constant elasticity of substitution
C.4 Implementation in MONASH

D Detailed results

References