Changes in the Functional Structure of Firms and the Demand for Skill

51 Pages Posted: 16 May 2003

See all articles by Eric Maurin

Eric Maurin

Paris School of Economics (PSE); IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

David Thesmar

Massachusetts Institute of Technology (MIT) - Economics, Finance, Accounting (EFA)

Date Written: March 2003

Abstract

We describe and analyse the changes in the occupational structure of French manufacturing firms between 1984 and 1995. Firms employ a much greater proportions of engineers and researchers working on the design and marketing of new products and a much lower proportion of high-skilled experts working in administration-related activities. Firms have also reduced the share of production-related activities at both the levels of high-skilled and low-skilled workers. We develop a very simple labour demand model that shows the role played by technological change. By reducing the costs of activities that are the easiest to program in advance (notably for product fabrication), new information technologies make it possible to allocate more human and material resources to the activities that are the most difficult to program in advance, notably for the conception and marketing of new products. We show that this is the main channel through which new information technologies increase the demand for skill.

Keywords: Skill, tasks, technological change

JEL Classification: D23, J23, O33

Suggested Citation

Maurin, Eric and Thesmar, David, Changes in the Functional Structure of Firms and the Demand for Skill (March 2003). CEPR Discussion Paper No. 3831. Available at SSRN: https://ssrn.com/abstract=407120

Eric Maurin (Contact Author)

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

David Thesmar

Massachusetts Institute of Technology (MIT) - Economics, Finance, Accounting (EFA) ( email )

77 Massachusetts Avenue
Cambridge, MA 02139-4307
United States
16172259767 (Phone)

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