Technology, Knowledge Spillovers and Changes in Skill Structure

This paper investigates and compares the changes in skill structure in six OECD countries (Finland, France, Germany, Japan, the United Kingdom and the United States) in the period 1975-1995 using new OECD data on employment by skill level and type. For all countries evidence is found that technical change is skill-biased in the sense that it favors high-skilled labor. In particular white-collar high-skilled workers have profited from recent technical change. However, rather than employees literally working on R&D it are workers who supervise and use the implemented parts of the advancements of R&D that profit from increased R&D efforts. In addition, the results are extended by stressing the importance of knowledge spillovers on changes in employment shares between high-skilled and low-skilled workers.labour economics ;

Griggs v Duke Power: Implications for College Credentialing

This paper is about a court case decided by the U. S. Supreme Court in 1971. Although attorneys recognize that the case is important to businesses, its impact on colleges and universities has been explored by only a few. As this paper will show, Griggs v. Duke Power may have enormously boosted the number of students in college and may have increased the differential in income between high school and college graduates. It may have led to higher tuition, without providing commensurate additional value.Indeed, it could even be a judicial decision whose economic implications have been matched by only a few far more celebrated cases in history such as Gibbons v. Ogden (1824), the Dred Scott decision (1857), and the Schechter Poultry case (1935). The hypothesis of this paper is that Griggs turned a college degree into a "credential." The content of the education did not change, but the degree -- the sheepskin -- became a necessary first step for a decent job.Today, for many jobs, only a degree opens the doors of potential employers' offices. It does not ensure a job -- college graduates often say that it is just a "fishing license" -- but it assures the employer that an applicant has at least a minimum level of skill and accomplishment. In the eyes of an employer, a degree demonstrates that the applicant passed a certain number of classes,completed outside reading, wrote at least a couple of papers, thought critically, and was able to manage his or her life in a way that led to graduation. Such skills -- determination, critical thinking and writing, organization, and independence -- are often valued by employers.Providing such assurance to employers did not always require a college degree, and this credentialing function did not happen by chance. Through a series of court rulings and subsequent legislation, a cumbersome set of legal rules has developed that make it difficult for employers to use testing to find out if an applicant is intelligent, capable, and diligent. As we will see, fear of litigation is always in the background. For many jobs, a college degree has become an alternate means of "testing."This paper will describe Griggs, the environment from which it emerged, and the subsequent judicial and political activity that created such great constraints on testing. It will discuss testing today and then provide economic information suggesting the magnitude of the changes that Griggs may have instigated. While this paper does not "prove" the educational and economic consequences of Griggs, it suggests that additional scholarly work on the impact of Griggs on higher education is appropriate

Business Climate Rankings and the California Economy

Examines California's varied rankings across business climate indices and the links between economic, wage, and employment growth and the factors measured in the indices, such as productivity, taxes and costs, welfare and transfer policies, and geography

The Gravity of Knowledge

How large are spatial barriers to transferring knowledge? We analyze the international operations of multinational firms to answer this fundamental question. In our model firms can transfer bits of knowledge to their foreign affiliates in either embodied (traded intermediates) or disembodied form (direct communication). Knowledge transfer costs interact with the knowledge intensity of production to determine the geographic structure of multinationals' input sourcing as well as its competitiveness in foreign markets. The model shows how data on observable trade costs and features of multinationals' global operations reveal the size and nature of knowledge transfer costs. Our empirical analysis confirms the model's predictions using firm-level data, quantifies the aggregate implications of the model for the structure of multinationals' operations, and demonstrates that transfer costs shape the knowledge content of intra-firm trade flows.