Authors	Hujer, R., Caliendo, M. and Radic, D.
Year	2001
Reference	IZA Discussion Paper No. 566, Bonn
Keywords	Mixed Simultaneous Equation Models, Labour Demand, Skill Biased Technological and Organizational Change
JEL-Classification	C35, D24, L23, O33
Presentations	European Economic Association - Venice 2002, Verein für Socialpolitik - Innsbruck 2002.
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Abstract	Recent years have brought growing evidence for an increasing labour demand for high skilled and a deterioration of the labour position of less skilled employees. The two most common explanations for this finding are an increasing international trade and a skill biased technological change. Another possible source for this phenomenon, that has received less attention in the recent discussion, are organizational changes that might affect labour demand in an asymmetric way, too. This paper analyses the interdependencies between labour demand for high and low skilled employees, innovation activities and organizational changes. To this aim mixed simultaneous equation models are estimated using the IAB establishment dataset collected by the German Federal Employment Office. Our empirical results indicate that technological change in the form of product innovations increases the demand for high and reduces the demand for low skilled employees. Organizational changes on the other hand do not have any significant effect on the labour demand, but are closely related to innovations.