Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing

56 Pages Posted: 6 Apr 2004 Last revised: 19 Aug 2010

See all articles by Eli Berman

Eli Berman

University of California, San Diego (UCSD) - Department of Economics; National Bureau of Economic Research (NBER)

John Bound

University of Michigan; National Bureau of Economic Research (NBER)

Zvi Griliches

(Deceased)

Date Written: January 1993

Abstract

This paper investigates the shift in demand towards skilled labor in U.S. manufacturing. Between 1979 and 1989. employment of production workers in manufacturing dropped by 2.2 mil1ion or 15 percent while employment of non-production workers rose by 3 percent. A decomposition of changing employment patterns in each of 450 industries reveals that the defense buildup and trade deficits can account for only a small part of the shift in demand towards non-production workers. We conclude that production labor-saving technological change is the most likely explanation for the shift in demand towards non-production workers since the shift is mostly due to changes in labor demand within industries rather than reallocation of employment towards industries with higher shares of skilled labor. Strong correlations between within-industry skil1 upgrading and both increased investment in computers on the one hand and increased investment in R&D on the other provide further evidence for production labor saving technological change.

Suggested Citation

Berman, Eli and Bound, John and Griliches, Zvi, Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing (January 1993). NBER Working Paper No. w4255. Available at SSRN: https://ssrn.com/abstract=408184

Eli Berman (Contact Author)

University of California, San Diego (UCSD) - Department of Economics ( email )

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John Bound

University of Michigan ( email )

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National Bureau of Economic Research (NBER)

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Zvi Griliches

(Deceased)

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