Capital-Skill Complementarity: Does capital disaggregation matter?

Correa, Juan and Lorca, Miguel and Parro, Francisco (2014): Capital-Skill Complementarity: Does capital disaggregation matter?

Abstract

Using Chilean manufacturing plants data, we�find: (1) the elasticity of substitution between capital and skilled labor is lower than the elasticity of substitution between capital and unskilled labor, and (2) the higher the technological component of the capital stock the larger the size of complementarity between capital and skilled labor. Our�findings show that capital, as an aggregate input, may under(over) state the complementarity between labor and the type of capital these workers actually use.

• Item Type: MPRA Paper
• Language: English
• Keywords: capital-skill complementarity, technological capital, translog function
• Subjects: D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity; L - Industrial Organization > L6 - Industry Studies: Manufacturing > L60 - General

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