Investment-specific technological change and labor composition: Evidence from the U.S. manufacturing

This paper examines the impact of investment-specific technological change on labor composition in U.S. manufacturing industries from 1974 to 1994. I show that investment-specific technological change increases the relative demand of non-production workers to production workers, while TFP growth does not change labor composition. Moreover, I find that the demand of skilled labor is stronger in the durable goods sector whereas the deskilling effect is stronger in the non-durable goods sector.