SMU SOE Seminar Series (October 8, 2025): Quantity-biased Technological Change

TOPIC:

ABSTRACT

Skill-biased technological change has long been linked to rising wage inequality. New technologies also allow firms to expand their scope of their operation. We formalize such quantity-biased technological change and calibrate the model to German matched employer employee data. The calibration attributes substantial changes in the firm size distribution and in wages to this channel. Quantity-biased technological change spreads out the firm size distribution with a moderating influence on wage inequality within blue and white collar occupations, yet it increases inequality between these occupations. The quantity-bias component in the blue collar occupations alone moderates inequality within and between occupations.

Keywords: Quantity-bias, Scale-bias, Technological Change, Skill-bias, Firm Size Distribution, Wage Inequality.

JEL: J23, J32, O33.

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