Occupational structure, technological innovation, and reorganization of production

Recent studies have found evidence for the complementarity between white-collar labor and technological capital. However, the estimated elasticities appear too small to explain the observed changes in labor occupational structure. Most of the increases in the share of white-collar employment have been concentrated during recessions, but aggregate investment in technological capital seems procyclical. We examine several potential explanations for this puzzle using a panel of Spanish manufacturing firms that provides highly disaggregated information on employees by occupation. The empirical results show that the decision of adopting new technologies by new innovative firms is countercyclical, and has a much stronger effect on occupational structure than the accumulation of technological capital by old innovative firms. (C) 2001 Elsevier Science B.V. All rights reserved. JEL classification: C33; J21: J44; L23.