Direction of Innovation & Labor Markets

Whereas a number of studies have considered the implications of employee mobility, comparatively little research has considered institutional factors governing the ability of employees to move from one firm to another. This paper explores a legal constraint on mobility—employee non-compete agreements—by exploiting Michigan's apparently inadvertent 1985 reversal of its non-compete enforcement policy as a natural experiment. Using a differences-in-differences approach, and controlling for changes in the auto industry central to Michigan's economy, we find that the enforcement of non-competes indeed attenuates mobility. Moreover, non-compete enforcement decreases mobility more sharply for...

We find that returns to occupational tenure are substantial. Everything else being constant, 5 years of occupational tenure are associated with an increase in wages of 12%–20%. Moreover, when occupational experience is taken into account, tenure with an industry or employer has relatively little importance in accounting for the wage one receives. This finding is consistent with human capital being occupation specific.

This paper argues that several of the poor labor market outcomes observed in the Great Recession can be traced back to a change in the demand pattern for skilled workers that started with the tech bust of 2000. In particular, we show that around the year 2000, the demand for cognitive tasks underwent a reversal. In response, high-skilled workers moved down the occupational ladder and increasingly displaced lower-educated workers in less skill-intensive jobs. While these effects were present before the financial crisis of 2008, they became more obvious after jobs associated with the housing bubble disappeared.

Score ↕	Year ↕	Title	Authors ↕	Theme ↕
8	2019	Who Becomes an Inventor in America? The Importance of Exposure to Innovation core [Title only] This paper directly addresses the talent supply constraints and human capital formation aspects of the project by analyzing the determinants of becoming an inventor. It provides insights into the entry cohort effects and early-life factors that shape the pipeline of specialized labor available for technological innovation. No abstract available.	Bell, Chetty, Jaravel, et al.	Other
7	2009	Mobility, Skills, and the Michigan Non-Compete Experiment core ↗ This paper directly addresses the project's theme of inventor mobility and transition costs by empirically demonstrating how institutional barriers affect the movement of specialized labor. It provides relevant evidence on the frictions that constrain skilled labor supply and the specific vulnerability of firm-specific human capital during technological or industrial shifts. Whereas a number of studies have considered the implications of employee mobility, comparatively little research has considered institutional factors governing the ability of employees to move from one firm to another. This paper explores a legal constraint on mobility—employee non-compete agreements—by exploiting Michigan's apparently inadvertent 1985 reversal of its non-compete enforcement policy as a natural experiment. Using a differences-in-differences approach, and controlling for changes in the auto industry central to Michigan's economy, we find that the enforcement of non-competes indeed attenuates mobility. Moreover, non-compete enforcement decreases mobility more sharply for...	Matt Marx, Deborah Strumsky, Lee Fleming
6	2009	OCCUPATIONAL SPECIFICITY OF HUMAN CAPITAL* core ↗ The paper provides relevant background by establishing that human capital is occupation-specific, which implies high switching costs and slow adjustment of skilled labor supply across different technology domains. This supports the project's premise that training takes time and creates frictions, although it does not directly analyze technology-driven shifts or innovation dynamics. We find that returns to occupational tenure are substantial. Everything else being constant, 5 years of occupational tenure are associated with an increase in wages of 12%–20%. Moreover, when occupational experience is taken into account, tenure with an industry or employer has relatively little importance in accounting for the wage one receives. This finding is consistent with human capital being occupation specific.	Gueorgui Kambourov, Iourii Manovskii
6	2010	How General Is Human Capital? A Task-Based Approach core [Title only] This paper directly addresses the core theme of skilled labor supply flexibility by using a task-based framework to quantify the transferability of human capital across different technologies. It provides a theoretical foundation for understanding the frictions and costs associated with labor adaptation to technological shifts, which is central to the project's inquiry. No abstract available.	Gathmann, Schonberg
5	2015	The Great Reversal in the Demand for Skill and Cognitive Tasks core ↗ This paper provides relevant background by documenting how shifts in technology and demand for cognitive tasks drive labor market outcomes and displacement between skill groups. However, it focuses on historical labor reallocation and displacement rather than the specific constraints, timing, and training costs associated with skilled labor supply elasticity and entry cohort effects during rapid technological waves like AI. This paper argues that several of the poor labor market outcomes observed in the Great Recession can be traced back to a change in the demand pattern for skilled workers that started with the tech bust of 2000. In particular, we show that around the year 2000, the demand for cognitive tasks underwent a reversal. In response, high-skilled workers moved down the occupational ladder and increasingly displaced lower-educated workers in less skill-intensive jobs. While these effects were present before the financial crisis of 2008, they became more obvious after jobs associated with the housing bubble disappeared.	Paul Beaudry, David A. Green, Benjamin Sand
10	1998	Adjusting to a New Technology: Experience and Training ↗ This paper directly addresses the project's core theme by explicitly modeling the time lags and initial slowdowns in labor supply adjustment caused by the education and training requirements of new technologies. It provides a theoretical framework for how technology-specific human capital formation constrains the immediate response of skilled labor to technological shifts, which is central to understanding talent supply constraints during rapid innovation waves. How does the economy react to the arrival of a new major technology? The existing literature on general-purpose technologies (GPTs) has studied the role that mechanisms like secondary innovations, diffusion, and learning by firms play in the adjustment process. By contrast, we focus on a new mechanism: the interplay between technological change and two types of human capital—technology-specific experience and education. We show that technological change that requires more education and training, like computerization, necessarily produces an initial slowdown. On the other hand, technological change that lowers the training requirements, like the move from the artisan shop to the factory, can...	Elhanan Helpman, Antonio Rangel
10	2025	Demographics and Technology Adoption ↗ This paper directly addresses the project's core themes by modeling how technology-specific human capital creation creates entry cohort effects and skill scarcity during technological waves. It explicitly examines the time lag in labor supply adaptation and the resulting impact on growth and innovation incentives, aligning perfectly with the focus on directed technical change and talent supply constraints. I study the impact of labor force composition on technology adoption and asset prices. In this regard, I document a wage gap between recent labor market entrants and incumbent skilled workers that comoves with aggregate productivity growth, innovation intensity, and valuation spreads. These patterns imply large, predictable growth opportunities concentrated in new technology firms, along with skill scarcity favoring new labor. Accordingly, I construct an endogenous growth model with a labor cohort effect: technological waves arrive at random times, and only cohorts born after the arrival of a wave have skills that are complementary to the new technology. Structural declines in the supply of...	Zeshu Xu
9	2018	Paradise of Novelty—Or Loss of Human Capital? Exploring New Fields and Inventive Output ↗ This paper directly addresses the project's focus on cross-technology switching costs and inventor mobility by examining the trade-offs between exploring new fields and maintaining inventive value. It provides empirical evidence on how specialized knowledge and collaboration mitigate the learning challenges associated with transitioning between technology domains, which is central to understanding talent supply constraints during technological shifts. Does a person become more or less creative when exploring a new field? Exploring new fields exposes a person to new knowledge that might increase the novelty of inventive output; at the same time, exploration means a lack of prior expertise and a learning challenge that might harm the value of that output. Using new combinations as a measure of novelty and citations as a measure of value, we demonstrate correlations between exploring new fields and increased novelty—but decreased value—in an inventor–firm fixed effects panel. The negative effect of exploring new fields on value is muted when the novice collaborates with experts or uses the scientific literature in the new field. We find...	Sam Arts, Lee Fleming
9	2024	Skills or Degree? The Rise of Skill-Based Hiring for Ai and Green Jobs ↗ This paper directly addresses the project's core theme of talent supply constraints by analyzing how labor markets adapt to rapid technological shifts in AI and green sectors through the lens of skill-based hiring. It provides empirical evidence on the lag between education systems and industry demand, highlighting how flexible hiring practices attempt to mitigate the time-intensive nature of traditional human capital formation. For emerging professions, such as jobs in the field of Artificial Intelligence (AI) or sustainability (green), labour supply does not meet industry demand. In this scenario of labour shortages, our work aims to understand whether employers have started focusing on individual skills rather than on formal qualifications in their recruiting. By analysing a large time series dataset of around one million online job vacancies between 2020 and 2023 from the UK and drawing on diverse literature on technological change and labour market signalling, we provide evidence that employers have started so-called “skill-based hiring” for AI and green roles, as more flexible hiring practices allow them to...	Eugenia González Ehlinger, Fabian Stephany
9	2020	Occupational mobility and the returns to training ↗ This paper directly addresses the project's focus on transition costs and the destruction of specialized human capital when workers switch occupations. It provides crucial empirical evidence on how such mobility frictions impact wage returns and human capital accumulation, which are central to understanding labor supply flexibility during technological shifts. Abstract The literature on the returns to training has pointed out that, immediately following a training episode, wages of participants in employer‐sponsored training increase substantially while wages of participants in government‐sponsored training hardly change. We argue that there is a potential selection issue—most of the government‐sponsored trainees are occupation switchers while most participants in employer‐sponsored training are occupation stayers. An occupational switch involves a substantial destruction of human capital, and once we account for the associated decline in wages, we find a large positive impact of both employer‐ and government‐sponsored training on workers’ human...	Gueorgui Kambourov, Iourii Manovskii, Miana Plesca
9	2018	Specific Human Capital and Wait Unemployment ↗ This paper directly addresses the project's core theme of how occupation-specific human capital creates switching costs that constrain labor supply flexibility during technological shifts. It provides empirical evidence for the 'training takes time' friction and the resulting delays in labor market adjustment, which are central to understanding how talent supply lags may constrain growth. A displaced worker might rationally prefer to wait through a long spell of unemployment instead of seeking employment at a lower wage in a job he is not trained for. I evaluate this trade-off using micro data on displaced workers. To achieve identification, I exploit the fact that the more a worker has invested in occupation-specific human capital, the more costly it is for him to switch occupations and therefore the higher is his incentive to wait. I find that between 9% and 17% of total unemployment in the United States can be attributed to wait unemployment.	Benedikt Herz
9	2017	Employee Career Constraint and Innovation ↗ [Title only] This title directly addresses the project's core concern with how labor market frictions and individual constraints affect the direction of innovation and talent allocation. It strongly suggests an investigation into the transition costs and barriers skilled workers face, which is central to understanding how talent supply lags constrain growth during technological shifts. No abstract available.	Novrys Suhardianto, Bright Gershion Godigbe
9	2024	The New Wave? The Role of Human Capital and STEM Skills in Technology Adoption in the UK ↗ This paper directly addresses the project's core theme of how skilled labor supply, specifically STEM human capital, shapes technology adoption during different technology waves like AI and cloud computing. It provides empirical evidence on the distinct role of specialized skills versus general human capital in driving the uptake of new technologies, which is central to understanding labor market adjustments to technological change. How important is the supply of skills for the adoption of advanced technologies? We study skill-biased information and communication technology adoption across two waves in the UK. We compare the ‘new wave’ during the 2010s - which includes ‘general pur-pose’ digital technologies such as cloud and artificial intelligence - with the previous wave of personal computers in the 1990s and early 2000s. We contrast the roles of general, college-level skills versus technology-related STEM skills in area and firm-level adoption patterns. Our findings indicate a continued role for general human capital in both waves, as well as a heightened role for STEM skills in driving the adoption of ‘new wave’...	Mirko Draca, Max Nathan, Viet Nguyen-Tien, et al.
9	2025	Technology Choice, Spillovers, and the Concentration of R&D ↗ This paper directly addresses the project's core theme of the direction of innovation and how market structure influences the allocation of R&D towards new versus incumbent technologies. It explicitly explores the transition between technology waves, such as the shift to artificial intelligence, which aligns with the research interest in how skilled labor and inventors sort across different technology paradigms. The direction of innovation shapes both current technologies and future innovation opportunities, as firms acquire expertise and create public knowledge through discovery. But how do firms choose which technologies to develop? Do they ever fail to exploit new technological paradigms? I build a new model of innovation and firm dynamics to study a novel link between market structure, the direction of innovation, and economic growth: Expertise in a current technology gives incumbents a comparative advantage at innovating it relative to entrants, who instead favor a new technology with higher growth potential. Each firm's innovation decisions influence others through knowledge spillovers, so...	Todd Lensman
9	2025	COVID-19, Low-skilled Migrants, and Automation in China ↗ This paper directly addresses the project's core theme of how labor market frictions and scarcity drive directed technical change and automation. It provides empirical evidence on the speed and direction of technological adaptation in response to labor supply shocks, which is central to understanding how talent constraints shape growth and innovation. We examine whether labor scarcity induces directed technical change by exploiting COVID-19's disruption to internal migration in China. Using household microdata, patent records, and robot installation data in a difference-indifferences framework, we find that migration-dependent regions experienced sharp increases in automation. Counties with higher pre-pandemic non-agricultural employment showed significant growth in robotics and manipulator patents while total patenting remained unchanged, indicating targeted labor-saving innovation rather than broader R&D expansion. Effects are strongest in tight labor markets with high migration dependence, inconsistent with demand shocks, health...	Jingcheng Jiang, Yalan Li
9	2024	Ai Adoption and the Talent Constraint ↗ This paper directly addresses the core theme of how education and training systems shape the flexibility of skilled labor supply to meet technology-driven demand. By empirically demonstrating that the availability of specialized talent constrains AI adoption, it provides crucial evidence for the talent supply lag mechanism central to the researcher's project. Despite the well-recognized benefits of AI for businesses, its actual adoption rate remains low.This study explores human capital availability as a barrier to AI integration. We take the newly launched Analytics and Data Science (ADS) programs over the past decade as a supply shock and examine their impact on firms' ADS job postings. The key idea behind our empirical strategy is that, if human capital availability constrains firms' AI adoption, job postings should increase following such supply shocks. Our findings reveal a significant human capital constraint, particularly among local firms hindered by the limited AI talent in the local job markets. These results underscore potential AI...	Yuanyang Liu, Wei Zheng, Missie Bowers
9	2025	Ai Adoption and the Talent Constraint ↗ [Title only] The title directly addresses the intersection of AI adoption and labor supply constraints, which is a central theme of the research project regarding how talent shortages may hinder technological progress. It likely explores the frictions and delays in skilled labor supply that traditional models overlook, fitting perfectly with the core inquiry into education and training system impacts. No abstract available.	Yuanyang Liu, Wei Zheng, Missie Bowers
8	1987	The Comparative Advantage of Educated Workers in Implementing New Technology ↗ This paper directly addresses the mechanism of how human capital facilitates the adjustment to new technology, which is central to understanding the speed of skilled labor supply adaptation. It provides empirical evidence on the comparative advantage of educated workers in implementing innovations, offering key insights into the transition costs and demand shifts relevant to the project's focus on directed technical change and labor market frictions. The authors estimate labor dem and equations derived from a (restricted variable) cost function in which "experience" on a technology (proxied by the mean age of the capital stock) enters "non-neutrally." The specification of the underlying cost function isbased on the hypothesis that highly educated workers have a comparative advantage with re spect to the adjustment to, and implementation of, new technologies. The empiric al results are consistent with the implication of this hypothesis, that the rel ative demand for educated workers declines as the ages of plant and (particularl y) of equipment increase, especially in R&D-intensive industries. Copyright 1987 by MIT Press.	Ann P. Bartel, Frank R. Lichtenberg
8	2019	Consider This: Training, Wages, and the Enforceability of Covenants Not to Compete ↗ This paper directly addresses the project's focus on education and training costs by providing empirical evidence on how labor market frictions, specifically noncompete agreements, influence firm-sponsored training and skilled labor supply. It offers crucial insights into the mechanisms that may constrain labor flexibility and adaptation speeds, aligning closely with the themes of training systems and technology-driven demand shifts. Using data from the Survey of Income and Program Participation, the author examines the effect of noncompete enforceability on employee training and wages. An increase from no enforcement of noncompetes to mean enforceability is associated with a 14% increase in training, which tends to be firm-sponsored and designed to upgrade or teach new skills. In contrast to theoretical expectations, the results show no evidence of a relationship between noncompete enforceability and self-sponsored training. Despite the increases in training, an increase from non-enforcement of noncompetes to mean enforceability is associated with a 4% decrease in hourly wages. Consistent with reduced bargaining power...	Evan Starr
8	2010	Markets for Inventors: Learning-by-Hiring as a Driver of Mobility ↗ This paper directly investigates inventor mobility and the characteristics of knowledge that drive transitions between firms, addressing the project's interest in cross-technology switching and talent supply dynamics. It provides empirical evidence on how specific types of human capital influence labor market adjustments, which is central to understanding the constraints on skilled labor flexibility during technological shifts. Hiring away inventors has long been recognized as a way of learning used by innovative firms. This paper claims that the characteristics of the knowledge accumulated by an inventor at his current employer affect what hiring firms can learn from him. The implication is that some inventors are more likely to be hired away than their coworkers. We analyze the relationship between the type of knowledge embodied by inventors working at IBM and their probability of moving. Relying on patent data to track the movement of inventors across firms and to characterize the kind of know-how they hold, we identify the following drivers of inventor mobility: the quality of their work; the complementarity...	Neus Palomeras, Eduardo Melero
8	2014	The Declining Fortunes of the Young Since 2000 ↗ The paper directly investigates entry cohort effects and how wage and employment outcomes vary based on the timing of specialization, a core theme of the project. It provides empirical evidence on how labor market adaptation and talent allocation respond to shifts in technology-driven demand for cognitive tasks. We document that successive cohorts of college and post-college degree graduates experienced an increase in the probability of obtaining cognitive jobs both at the start of their careers and with time in the labor market in the 1990s. However, this pattern reversed for cohorts entering after 2000; profiles of the proportion of a cohort in cognitive occupations since school completion fall and become flatter with successive cohorts. Since cohort-wage profiles display a similar pattern, these findings appear to fit with a strong increase in demand for cognitive tasks in the 1990s followed by a decline in the 2000s.	Paul Beaudry, David A. Green, Benjamin Sand
8	2018	STEM Careers and the Changing Skill Requirements of Work ↗ The paper directly addresses the project's focus on technology-specific human capital and the transition costs workers face as skills become obsolete during technological shifts. It provides empirical evidence on how rapid changes in job requirements affect the supply of specialized labor and the timing of specialization within technology waves. Science, Technology, Engineering, and Math (STEM) jobs are a key contributor to economic growth and national competitiveness. Yet STEM workers are perceived to be in short supply. This paper shows that the "STEM shortage" phenomenon is explained by technological change, which introduces new job skills and makes old ones obsolete. We find that the initially high economic return to applied STEM degrees declines by more than 50 percent in the first decade of working life. This coincides with a rapid exit of college graduates from STEM occupations. Using detailed job vacancy data, we show that STEM jobs change especially quickly over time, leading to flatter age-earnings profiles as the skills...	David Deming, Kadeem Noray
8	2022	Labor Market Fluidity and Human Capital Accumulation ↗ This paper directly addresses the project's focus on labor market flexibility and human capital accumulation by empirically linking job-to-job mobility to skill acquisition and productivity. It provides critical evidence on how labor market fluidity influences the speed at which workers adapt to new opportunities, a key mechanism underlying the constraints on skilled labor supply discussed in the research. Using panel data from 23 OECD countries, I document that wages grow more over the life-cycle in countries where job-to-job mobility is more common. A life-cycle theory of job shopping and accumulation of skills on the job highlights that a more fluid labor market allows workers to faster relocate to jobs where they can better use their skills, incentivizing accumulation of skills. Lower labor market fluidity reduces life-cycle wage growth by 20 percent and aggregate labor productivity by nine percent across the OECD relative to the US. I derive a set of testable predictions for training and confront them with comparable cross-country training data, finding support for the theory.	Niklas Engbom
8	2011	Occupational mobility within and between skill clusters: an empirical analysis based on the skill-weights approach ↗ [Title only] This paper directly addresses the core theme of transition costs and occupational mobility between different skill clusters, which is central to understanding how skilled labor supply adjusts to technological shifts. The empirical focus on mobility within and between clusters provides relevant evidence for modeling the frictions that constrain the rapid adaptation of human capital to new technology waves. No abstract available.	Regula Geel, Uschi Backes‐Gellner
8	2019	The Labor Market Effects of Legal Restrictions on Worker Mobility ↗ This paper closely relates to the project's focus on inventor mobility and cross-technology switching costs by empirically examining how legal frictions restrict skilled worker movement. It provides crucial context on how barriers to labor supply flexibility can impede the rapid reallocation of talent required during periods of technological change. We analyze how the legal enforceability of Noncompete Agreements (NCAs) affects labor markets. Using newly-constructed panel data, we find that higher NCA enforceability diminishes workers’ earnings and job mobility, with larger effects among workers most likely to sign NCAs. These effects are far-reaching: examining local labor markets that cross state borders reveals that enforceability affects workers’ earnings in different legal jurisdictions. Revisiting a classic model of wage-setting, we find that—in contrast to prior evidence—workers facing high enforceability are unable to leverage tight labor markets to increase their wage. Finally, higher NCA enforceability exacerbates gender and...	Matthew S. Johnson, Kurt Lavetti, Michael Lipsitz
8	2017	Do Higher Wages Reduce Knowledge Worker's Job Mobility? Evidence for Swedish Inventors ↗ This paper directly addresses the project's theme of inventor mobility and the factors influencing skilled worker transitions across firms, a key component of understanding talent supply constraints. By analyzing the non-linear effects of wages on mobility for different inventor types, it provides empirical evidence on the frictions and incentives that shape the labor market response to technological opportunities. Abstract Based on linked employer‐employee panel data on all Swedish inventors, this paper analyses how wages affect inventors’ job mobility. It is commonly assumed that higher wages reduce mobility because they reduce the value of outside opportunities. We argue that higher wages also send performance signals to potential employers, who raise their wage offers in response. By disentangling the effects of higher wages, we show evidence of a utility and an opportunity cost effect, which reduce mobility, and a performance‐signalling effect, which increases mobility. In our data, the effects cancel each other out, with no effects of wages on mobility rates on average. We find, however, that...	Olof Ejermo, Torben Schubert
8	2018	Strategic human capital management in the context of cross‐industry and within‐industry mobility frictions ↗ This paper directly addresses the project's core themes by empirically modeling how mobility frictions and skill transferability constraints influence firms' decisions on internal training versus external hiring. It provides crucial insights into the transition costs and time required for workers to adapt, as well as the resulting impacts on wage structures and human capital formation during periods of labor market adjustment. Research Summary : We develop and test a theory examining how frictions that restrict mobility across industries and frictions constraining mobility within an industry can co‐occur to effectively isolate individual human capital, ultimately changing the firm's make‐versus‐buy decision for human capital. Empirically, we demonstrate that when cross‐industry frictions in the form of limited skill transferability and within‐industry frictions in the form of noncompete enforceability are both present, employees exhibit longer tenures, firms hire workers with less initial experience, firms change the amount and nature of training provided, and wages marginally increase. These findings suggest...	Evan Starr, Martin Ganco, Benjamin A. Campbell
8	2020	Occupational Inequality in Wage Returns to Employer Demand for Types of Information and Communications Technology (ICT) Skills: 1991–2017 ↗ The paper directly addresses the project's interest in entry cohort wage premiums and the timing of specialization within technology waves by analyzing wage returns to novel versus core ICT skills. It provides empirical evidence on how exposure to specific technology waves generates inequality, which informs the mechanisms of directed technical change and skilled labor supply adaptation. Is employer demand for particular types of ICT skills needed for job performance associated with a wage premium? The claim is that a wage premium is contingent upon whether an ICT skill is a core component of the occupational skill set or a newly introduced (i.e., novel) skill element, thus engendering occupational inequality in wage returns. The study proposes a sophisticated conceptualization and extraction of types of ICT skills. It is the first one to measure employer demand for these skills directly, repeatedly (i.e., annually) and from a long-term perspective. Analyses are based on data from job advertisements taken from the Swiss Job Market Monitor (SJMM), a longitudinal dataset from...	Marlis Buchmann, Helen Buchs, Ann-Sophie Gnehm
8	2010	Recruiting for Ideas: How Firms Exploit the Prior Inventions of New Hires ↗ [Title only] This paper directly addresses the researcher's interest in inventor mobility and the transition costs associated with moving specialized talent between technology waves. By examining how firms leverage prior inventions, it sheds light on the role of specific human capital and the implicit time costs involved in integrating skilled workers into new innovation streams. No abstract available.	Jasjit Singh, Ajay Agrawal
8	2024	Dynamics of the Digital Workforce: Assessing the Interplay and Impact of AI, Automation, and Employment Policies ↗ The paper directly addresses the project's core theme of talent supply constraints by empirically identifying significant skills gaps and the need for training interventions amidst AI-driven technological change. Its focus on the adequacy of education and policy in facilitating labor market adjustment provides relevant empirical context for analyzing how human capital formation lags behind demand shifts. The rapid integration of artificial intelligence (AI) and automation within various sectors poses challenges and opportunities for the global workforce. This study investigates the implications of AI and automation on employment patterns, skills requirements, and remote work infrastructures. Employing a quantitative research design, data was collected through a structured questionnaire administered to 482 professionals across the information technology, healthcare, and finance sectors. The analysis was conducted using Partial Least Squares Structural Equation Modeling (PLS-SEM) to test hypotheses related to the impact of technological advancements on employment. Major findings indicate a...	Oluwaseun Oladeji Olaniyi, Favour Amarachi Ezeugwa, Chinenye Gbemisola Okatta, et al.
8	2020	Inventor mobility and productivity: a long-run perspective ↗ This paper directly addresses the project's focus on inventor mobility and transition costs by quantifying the impact of firm and geographical moves on inventor productivity. It provides critical empirical evidence on the long-run adjustment period following mobility, which helps contextualize the time lags in labor supply responses to technological shifts. The aim of this paper is to explore the influence of mobility on inventor productivity. Unlike most previous literature in this field, we separate the impact of firm mobility from geographical mobility. Our paper is also novel because of the long period of investigation. We report how the different forms of mobility, and their impacts, have changed over the period 1836–1975 using US patent data. Mobility is identified for serial inventors who change assignee and/or location over time. Firm mobility and geographical mobility increase throughout the period examined, with only temporary reversals around the Great Depression and Second World War. Comparisons across matched samples of mobile and...	Frank van der Wouden, David L. Rigby
8	2019	IT, AI and the Growth of Intangible Capital ↗ This paper closely addresses the project's focus on the time lag in labor market adaptation by quantifying IT intangible capital and its depreciation, which reflects the time required to acquire and adapt firm-specific human capital. It provides crucial empirical context on how skilled labor and organizational adjustments contribute to growth during technology waves, directly informing the analysis of talent supply constraints and transition costs. General purpose technologies like IT and AI typically require complementary investments in firm-specific human and organizational capital to create value for firms. However, good measures of the stock of this IT intangible capital (ITIC) have remained elusive, as has an understanding of how the accumulation of ITIC contributes to economic growth. We use a new extended firm-level panel on IT skills along with Hall’s Quantity Revelation Theorem to assess the nature and growth of ITIC over the last thirty years. We then examine implications for the current wave of AI investment. Our estimates suggest that ITIC accounted for about 25% of firms’ total assets by 2016 and that this capital is...	Prasanna Tambe, Lorin M. Hitt, Daniel Rock, et al.
8	2024	How does worker mobility affect business adoption of a new technology? The case of machine learning ↗ This paper directly addresses the project's focus on labor market frictions by examining how worker mobility affects the adoption of a new technology (machine learning). It provides empirical evidence on the costs associated with skilled labor retention during technology diffusion, aligning with the research theme of how labor market dynamics constrain or facilitate technological adaptation. Abstract Research Summary We investigate how worker mobility influences the adoption of a new technology using state‐level changes to the enforceability of noncompete agreements as an exogenous shock to worker mobility. Using data on over 153,000 establishments from 2010 and 2018, we find that changes that facilitate worker movements are associated with a significant decline in the likelihood of adoption of machine learning. Moreover, we find that the magnitude of decline depends upon the size of the establishment, the extent of predictive analytics adoption in its industry, and the number of large establishments in the same industry‐location. These results are consistent with the view that...	Ruyu Chen, Natarajan Balasubramanian, Chris Forman
8	2021	Modelling Artificial Intelligence in Economics ↗ This paper directly addresses the interaction between AI, a key technology driving shifts in skill demand, and endogenous growth models. It critiques and extends existing frameworks by incorporating 'abilities' alongside skills, which is relevant for analyzing how technological changes impact labor market dynamics and human capital requirements. Economists' two main theoretical approaches to understanding Artificial Intelligence (AI) impacts have been the task-approach to labor markets and endogenous growth theory. Therefore, the recent integration of the task-approach into an endogenous growth model by Acemoglu and Restrepo (AR) is a useful advance. However, it is subject to the shortcoming that it does not explicitly model AI and its technological feasibility. The AR model focuses on tasks and skills but not on abilities, while abilities better characterize AI services' nature. This paper addresses this shortcoming by elaborating the task-approach with AI abilities for use within endogenous growth models. This more...	Thomas Gries, Wim Naudé
8	2023	Skills or Degree? The Rise of Skill-Based Hiring for AI and Green Jobs ↗ The paper directly addresses the lag in skilled labor supply responding to technology-driven demand, specifically focusing on AI and green jobs as key examples of rapid technological change. It provides empirical evidence that alternative training mechanisms like micro-certificates and apprenticeships can accelerate adaptation, highlighting the role of education systems in mitigating talent supply constraints. Emerging professions in fields like Artificial Intelligence (AI) and sustainability (green jobs) are experiencing labour shortages as industry demand outpaces labour supply. In this context, our study aims to understand whether employers have begun focusing more on individual skills rather than formal qualifications in their recruitment processes. We analysed a large time-series dataset of approximately eleven million online job vacancies in the UK from 2018 to mid-2024, drawing on diverse literature on technological change and labour market signalling. Our findings provide evidence that employers have initiated"skill-based hiring"for AI roles, adopting more flexible hiring practices to...	Eugenia González Ehlinger, Fabian Stephany
8	2011	Value of Invention, Prolific Inventor Productivity and Mobility: Evidence from Five Countries, 1975-2002 ↗ This paper directly addresses the project's theme of inventor mobility and cross-technology switching costs by empirically analyzing the impact of moving between technical fields on inventor productivity. It provides relevant evidence on how talent supply responds to different technological contexts, although it focuses on productivity and value rather than the macroeconomic growth constraints or training time lags specified in the core research questions. The aim of this paper is to provide new insights into (1) the determinants of the value of inventions and (2) the role that mobility plays in the behavior of prolific inventors, whom we identify based on the number of patents exceeding a threshold of productivity. We examine mobility in two dimensions: from firm to firm (inter-firm) and from one technical field to another. We exploit data on patents filed by inventors from five countries (France, uk, Germany, us and Japan) in the USPTO during the period from 1975 to 2002. From our regressions, we show that: (1) as predicted by evolutionary theory, inventor productivity is a positive determinant of invention value, (2) inter-firm mobility is...	William R. Latham, Christian Le Bas, Dmitry Volodin
8	2015	Does Labour Mobility Foster Innovation? : Evidence from Sweden This paper directly addresses the project's focus on inventor mobility and talent sorting by empirically demonstrating how knowledge worker movement impacts innovation output. It provides relevant evidence on the mechanisms of skill transfer and labor market adjustment, which are central to understanding how skilled labor supply responds to technological opportunities. By utilising a Swedish unique, matched employer-employee dataset that has been pooled with firm-level patent application data, we provide new evidence that knowledge workers’ mobility has a positive and strongly significant impact on firm innovation output, as measured by firm patent applications. The effect is particularly strong for knowledge workers that have previously worked in a patenting firm (the learning-by-hiring effect), but firms losing a knowledge worker are also shown to benefit (the diaspora effect), albeit more weakly. Finally, the effect is more pronounced when the joining worker originates in another region.	Pontus Braunerhjelm, Ding Ding, Per Thulin
8	2019	The returns to occupation-specific human capital – Evidence from mobility after training. ↗ This paper directly investigates the transferability and returns of occupation-specific human capital, which is central to understanding the time and costs involved in labor supply adjustment. It provides empirical evidence on how specialized training creates frictions for workers moving between occupations, thereby constraining the flexibility of skilled labor in response to shifting demands. Using a longitudinal dataset based on the PISA 2000 survey, we analyze the effect of inter-firm and occupational mobility on post-training wages in Switzerland to assess the transferability of the human capital acquired in training. We show that OLS provides a lower bound estimate of the wage effects of inter-firm and occupational mobility. Inter-firm mobility has no significant wage effect in OLS regressions. However, those who stay in their occupational field earn about 5 percent more than their colleagues who change occupation. We find no evidence for adverse selection when accounting only for apprentices’ level of ability. Accounting for the endogeneity of mobility tends to increase the...	Barbara Müller, Jürg Schweri
8	2017	The Costs of Occupational Mobility: An Aggregate Analysis ↗ This paper directly quantifies the transition costs for skilled workers moving between occupations, which is a key mechanism for understanding labor supply flexibility during technological shifts. By isolating task-independent versus task-specific costs, it provides critical empirical evidence on the frictions that constrain the pace of adaptation in labor markets. We estimate the costs of occupational mobility and quantify the relative importance of differences in task content as a component of total mobility costs. We use a novel approach based on a model of occupational choice that delivers a gravity equation linking worker flows to occupation characteristics and transition costs. Using data from the Current Population Survey and the Dictionary of Occupational Titles we find that task-specific costs account for no more than 15% of the total transition cost across most occupation pairs. Transition costs vary widely across occupations and, while increasing with the dissimilarity in the mix of tasks performed, are mostly accounted for by...	Guido Matías Cortés, Giovanni Gallipoli
8	2015	Measuring the Specificity of Occupational Training Curricula and Labor Market Flexibility – An Economic Perspective on the Curriculum Development of VET Occupations This paper directly addresses the project's core theme of how education and training systems shape labor supply flexibility by quantifying occupational specificity and transition costs. It provides empirical evidence on how specific skill bundles constrain mobility, offering critical insights into the frictions that delay skilled labor adaptation to new technological demands. In this paper we analyze the training curricula of VET (vocational education and training) occupations using detailed data on learned skills from official trainings regulations. We explore how differences in the skill bundles of occupational curricula can be measured and how such differences affect graduates' long-term labor market outcomes. Based on Lazear’s skill weights approach, we develop novel measures for the skill distance between occupations and the specificity of occupations. We find that workers who change between occupations with very dissimilar skill weights are faced with lower wages after the change compared to workers who change to similar occupations. Additionally, workers...	Christian Eggenberger, Miriam Rinawi, Uschi Backes‐Gellner
8	2019	Over-Skilling, Under-Skilling, and Higher Education ↗ [Title only] This title directly addresses the core theme of labor supply flexibility by highlighting the mismatch between worker skills and job requirements, which is a key friction in adapting to technological change. It likely explores how higher education systems contribute to or mitigate these imbalances, thereby influencing the pace of labor market adjustment during periods of rapid innovation. No abstract available.	Hugo Figueiredo
8	2022	Does Updating Education Curricula Accelerate Technology Adoption in the Workplace? Evidence from Dual Vocational Education and Training Curricula in Switzerland ↗ This paper directly addresses the project's core question by empirically demonstrating how education curriculum updates reduce the lag in skilled labor supply responding to technological shifts. It provides critical evidence on the role of training systems in mitigating talent supply constraints during technology adoption waves, which is central to the researcher's interest in directed technical change and labor market frictions. In an environment of accelerating technological change and increasing digitalization, firms need to adopt new technologies faster than ever before to stay competitive. This paper examines whether updates of education curricula help to bring new technologies faster into firms’ workplaces. We study technology changes and curriculum updates from an early wave of digitalization (i.e., computer-numerically controlled machinery, computer-aided design, and desktop publishing software). We take a text-as-data approach and tap into two novel data sources to measure change in educational content and the use of technology at the workplace: first, vocational education curricula and, second, firms’ job...	Tobias Schultheiss, Uschi Backes‐Gellner
8	2024	The Impact of Hiring Costs for Skilled Workers on Apprenticeship Training: A Comparative Study ↗ This paper directly investigates how labor market frictions, specifically hiring costs, influence the supply of skilled labor through apprenticeship training. It provides empirical evidence on how training systems adapt to economic conditions, which is central to understanding the flexibility of skilled labor supply and talent formation during technological shifts. This study analyzes the relationship between firms’ costs of hiring skilled workers and their provision of internal apprenticeship training. Our empirical analysis draws on four waves of firm surveys conducted in Germany and Switzerland that include detailed information on firms’ hiring costs for skilled workers and training practices. Using an indicator of labor market tightness as an instrumental variable, we identify a substantial hiring cost elasticity of apprenticeship contracts of 1.4 for Swiss firms. Although we also find a positive and increasing cost elasticity for German firms over time, its magnitude is considerably smaller. Our results are consistent with the perspective that...	Manuel Aepli, Samuel Muehlemann, Harald Pfeifer, et al.
8	2015	Inter-industry labor reallocation and task distance ↗ This paper directly addresses the project's focus on transition costs and skill specificity by quantifying how 'task distance' creates frictions in inter-industry labor reallocation. Its empirical findings on earnings losses and demographic heterogeneity provide crucial evidence for understanding how human capital formation and technology-driven shifts constrain labor supply flexibility. This paper investigates factors preventing inter-industry labor reallocation by estimating the determinants of inter-industry worker flow and earnings change after a job change. We find that the difference in required tasks is an important reason for earnings reduction after an inter-industry job change, and thus, workers may hesitate to move to industries requiring a different set of tasks for fear of losing the wage premium acquired by task-specific human capital. In addition, more workers switch to industries with which their previous industry had larger transactions, although it affects earnings changes only marginally. On the other hand, industry performance does not affect labor...	Ayako Kondo, Saori Naganuma
8	2021	Hollowing out and slowing growth: The role of process innovations ↗ This paper directly addresses the project's core theme by modeling skill acquisition costs and the time required for lower-skilled workers to adapt to new technologies. It provides a theoretical framework for how technological shifts, specifically process innovations, drive labor market adjustments and growth, aligning with the research focus on skilled labor supply flexibility and technology-driven demand shifts. I develop an endogenous growth model with skill acquisition, which can simultaneously account for labour market polarization and a slow down in labour productivity growth. When a new technology enters the economy, it requires implementation by high-skilled workers. Over time, process innovation makes the technology more user-friendly so that lower skilled workers can also operate it. Process innovation contributes to growth by increasing the range of technologies that a lower skilled worker can operate. It also reallocates labour demand for different skill-groups and thereby affects the income distribution. Skill can be acquired through a costly learning activity and workers face different...	Wenbo Zhu
8	2016	Paradise of Novelty – or Loss of Human Capital? Changing Fields and Inventive Output [Title only] The title explicitly addresses 'changing fields,' which directly maps to the project's interest in inventor mobility, cross-technology switching costs, and the transition between technology waves. It also engages with the theme of human capital loss, relating to the costs and frictions involved in skilled labor adaptation during technological shifts. No abstract available.	Sam Arts, Lee Fleming
8	2007	Prolific inventors and their mobility: scale, impact and significance. What the literature tells us and some hypotheses The paper directly addresses the project's focus on inventor mobility and the accumulation of technology-specific human capital. By analyzing how inventor movement affects productivity and invention value, it provides key insights into the transition costs and sorting mechanisms across different technology waves. In this paper we survey the literature dealing with the category of prolific inventor. We set out some elements regarding nature, scale, significance and impact of the mobility of this population of prolific inventors. In particular the paper suggests an analysis that measures the effects on mobility on individual inventive productivity and the value of invention. We call “prolificness ” the capacity to accumulate knowledge and experience through mobility (that is to say through their capital of contacts and interactions). The first goal of this paper is to survey the literature dealing with the category of prolific inventor. It is a piece of a larger research project that aims to assess...	Christian Le Bas
8	2018	Knowledge Fit and Productivity Gains from Employee Mobility ↗ [Title only] The paper directly addresses talent mobility and the costs associated with moving skills between firms or technologies, which is central to understanding labor supply flexibility. It likely provides empirical evidence on how 'knowledge fit' influences productivity, offering insights into the frictions that slow the adaptation of specialized labor during technological shifts. No abstract available.	Gaétan de Rassenfosse, Karin Hoisl
8	2021	Structural change and the income of nations ↗ This paper directly addresses the project's themes of directed technical change and skilled labor supply by analyzing how technology adoption drives the allocation of workers to high-TFP sectors. It provides relevant macro-level evidence on the relationship between skilled labor availability and structural transformation, which contextualizes the supply-side constraints discussed in the research project. An increase in the supply of skilled labor has been common across the world. However, despite the rise in skilled labor force, not all countries have achieved high income levels, even when their structural transformation follows the same path (from agriculture to industry and, then, from industry to services). Skilled workers might end up in either high or low TFP sectors, according to two opposite theories of structural change (skill-biased structural transformation and stagnant structural transformation). We show that directed technical change is needed to achieve skill-biased structural transformation and, therefore, skilled workers are allocated to high TFP sectors. We present macrodata...	Cynthia Armas, Fernando Sánchez‐Losada
8	2026	Rising Skill Supply, Technological Changes, and Innovation: A Quantitative Exploration of China ↗ The paper directly investigates the quantitative impact of skilled labor supply expansion on firm productivity and R&D allocation, aligning with the project's focus on human capital formation and technology-driven demand shifts. It provides relevant structural evidence on how labor market adjustments influence innovation incentives and productivity growth during periods of technological change. Can the expansion of higher education lead to firm productivity growth? In this paper, we examine how China’s college expansion program contributes to the rapid growth of firms’ R&D expenditure and productivity. In our model, heterogeneous firms make endogenous R&D decisions, requiring them to allocate skilled workers between production and R&D. We structurally estimate the model using firm-level data on the level and distribution of R&D, as well as macro-level data on skill prices and sectoral allocation. Quantitative analysis reveals that between 2004 and 2018, the combination of the R&D-sector-biased technology shock, the skill-biased technology shock, and the skilled-labor supply shock...	Chengcheng Jia, Shijun Gu
8	2025	Skill Supply Meets Technological Change: Unraveling the Impact of Higher Education on Job Polarisation ↗ The paper directly addresses the interaction between skilled labor supply and technological change by modeling how an increase in education supply induces firms to adopt skill-intensive technologies. It provides relevant empirical evidence and a theoretical framework on the adjustment dynamics between human capital formation and technology adoption, which are central to the project's inquiry. The share of graduates in the UK doubled between the mid-1990s and mid-2010s, yet there was no significant decline in graduate wages or shift into lower-skilled jobs. This paper develops a general equilibrium model to explain how the labor market absorbed this surge in skilled workers. The model combines Routine-Biased Technical Change (RBTC), between-industry demand shifts, and an endogenous technology adoption mechanism that responds to changes in skill supply. As the supply of graduates grows, firms adopt more skill-intensive technologies, increasing demand for abstract occupations. Calibrated to UK data, the model replicates key employment trends and shows that education expansion...	Wenchao Jin
8	2024	Skill Supply Meets Technological Change:Unraveling the Impact of Higher Education on Job Polarisation ↗ The paper directly addresses the core theme of how education and training systems affect the pace of adaptation by modeling the interaction between skilled labor supply surges and technology adoption. It provides relevant empirical context on how the labor market absorbs increased human capital through technological shifts, although it focuses more on equilibrium absorption than the specific frictions or transition costs of skill supply lags. The share of graduates in the UK has doubled within two decades, with no significant wage decline or occupational downgrading among graduates. This paper develops an equilibrium model to illustrate how this surge in skilled labor is absorbed through firms’ adoption of new technologies and the growth of high-skilled occupations. The model incorporates Routine Biased Technical Change (RBTC), between-industry demand shifts, and shifts in the supply of skills. Counterfactual analysis suggests that of all the growth in abstract employment, half can be explained by exogenous Routine-Biased Technical Change (RBTC) and about 40% by the increase in skill supply.	Wenchao Jin
8	2025	Skill-Biased Technical Change and the Decline of Thailand's Skill Premium ↗ [Title only] This paper likely examines how technology adoption impacts the demand for skilled labor and wage inequality in an emerging market context, which relates to the project's theme of technology-driven shifts in industry demand. While it focuses on the labor market outcome rather than the supply-side constraints or training time lags central to the project, it provides crucial empirical evidence on the demand side of skilled labor dynamics during technological change. No abstract available.	Kuson Leawsakul
8	2026	Factor-Eliminating Technical Change, Human Capital Formation, and Development Traps ↗ This paper directly addresses the interaction between technical change and human capital formation, highlighting how incomplete skill upgrading can constrain capital accumulation and limit the adaptability of the labor supply. It aligns with the project's focus on training time lags and talent supply constraints by demonstrating how education responses may fail to keep pace with technology-driven shifts in demand. How does automation (factor-eliminating technical change) affect long-run development through its interaction with human capital formation? Although such technical change is often expected to promote growth, we show that it can instead slow or even halt capital accumulation. As automation displaces unskilled labor, the skill premium rises and induces education. Yet education responses are incomplete: partial skill upgrading expands the supply of skilled labor and limits further increases in skilled wages. Capital accumulation may therefore stall, trapping the economy in a low-capital steady state even when advanced technologies are available. We develop a general equilibrium model in which...	Hideki Nakamura, Ryosuke Shimizu, Shohei Momoda
8	2026	Restricting Temporary Contracts Increases Firm-Provided Training: Evidence from Spain ↗ This paper directly addresses the project's theme of how institutional factors and employment stability influence the pace and nature of skill formation and training investment. It provides empirical evidence on how labor market regulations shape human capital development, a key mechanism for understanding skilled labor supply flexibility. We examine whether restricting temporary contracts increases firms' investment in worker training, exploiting Spain’s 2022 labour market reform. Using 3.1 million online job postings from 2018 to 2024, we implement a difference-in-differences design that leverages pre-reform variation in reliance on temporary contracts across occupations. More exposed occupations shifted toward permanent hiring and increased advertised training relative to less exposed occupations. Training rose by 4.3 percentage points, fully closing the pre-reform gap by 2024. These results provide evidence that longer expected employment duration increases firms' investment in training, identifying a channel through...	Pawel Adrjan, Jonas Jessen, Carlos Victoria-Lanzon
8	2025	Dynamics of Mirrleesian Taxation in the Education Race Model ↗ This paper directly addresses the interaction between skill-biased technical change and the supply of educated labor, which are central to the project's focus on talent supply lags and technology-driven demand shifts. It provides a theoretical framework for how education systems adapt to technological changes, offering key mechanisms regarding the dynamics of skilled labor supply and optimal policy responses. The wage premium of college workers relative to non-college workers, or the so-called college wage premium, is an important aspect of earnings inequality. This paper adopts the education race model to address the question: How should Mirrleesian taxation be set dynamically in response to the evolution of the college wage premium resulting from the race between technology (skill-biased technical change, SBTC) and education (increasing supply of skills)? It is shown that while the overall structure of optimal marginal tax rates becomes progressively less over time than it would be if only the force of technology were to exist, the overall structure becomes progressively more over time than it...	Yunmin Chen, Chao Yang
8	2025	Dynamics of Mirrleesian Taxation in the Education Race Model ↗ This paper directly addresses the interaction between skill-biased technical change and the supply of educated labor, which is central to the project's inquiry into how education systems respond to technological shifts. It provides theoretical insights into the 'race' between technology and human capital formation, offering a framework for understanding the dynamics of skilled labor supply constraints and their impact on economic outcomes. The wage premium of college workers relative to non-college workers, or the so-called college wage premium, is an important aspect of earnings inequality. This paper adopts the education race model to address the question: How should Mirrleesian taxation be set dynamically in response to the evolution of the college wage premium resulting from the race between technology (skill-biased technical change, SBTC) and education (increasing supply of skills)? It is shown that while the overall structure of optimal marginal tax rates becomes less progressive over time than it would be if only the force of technology were to exist, the overall structure becomes more progressive over time than it...	Yunmin Chen, Choongryul Yang
8	2026	From Techne Equalisation to Phronesis Premium: Generative AI and Seniority Bias in Ageing Europe ↗ The paper directly addresses the interaction between generative AI and labor supply dynamics, specifically focusing on how technology adoption shifts the demand for specific skill sets like judgment over procedural competence. It provides empirical evidence on how these technology-driven shifts impact different age cohorts, offering relevant context for understanding the flexibility of skilled labor supply and the potential constraints or reallocations within the talent pool. Contrary to the prevailing view that older workers are disadvantaged by or unable to keep pace with technological change, this paper argues that generative AI may advantage them at the expense of younger ones. The mechanism operates through two channels. First, generative AI equalises procedural competence (techne) across occupations and within the same occupation and task, enabling average and lower-performing workers to reach the quality of top performers, an executional prosthesis that recovers skills depreciated with age. Second, as execution becomes cheap and replicable, the scarce factor shifts to skills that AI cannot easily replicate yet, such as contextual judgment and responsible...	Dora Moscato
8	2025	How AI Skills Shape Labor Income Shares: Evidence from Online Job Vacancies in China ↗ This paper closely relates to the project by empirically examining how AI skill acquisition impacts labor economics within specific industrial contexts, directly addressing the theme of AI and skill demand. It provides valuable evidence on the labor market adjustment process and the expansion of the talent pool, which are key mechanisms in understanding how human capital formation responds to technological shifts. Based on a comprehensive analysis of online recruitment data of Chinese listed firms from 2016 to 2022, the China Stock Market and Accounting Research (CSMAR) database and the China City Statistical Yearbooks, this study finds that improvements in employees’ AI skills significantly increase the labor income share. This positive effect is further reinforced when corporate costs decline and the talent pool expands. The heterogeneity analysis further indicates that the effect is more pronounced in firms located in cities with higher housing prices, in industries with greater technological sophistication, and within supply chains characterized by lower levels of integration.	Yunyun Liu, Yuqiao Hou, Yue Liu
8	2025	Maximizing Human Capital Potential: Why We Need Human Capital Driven Economic Models and Economic Planning ↗ [Title only] The title explicitly advocates for human capital driven economic models, directly addressing the project's focus on how education and training systems shape labor supply flexibility. It aligns well with the core themes of endogenous growth and the constraints imposed by talent supply on technological adaptation. No abstract available.	Sujay Rao Mandavilli
8	2025	Build it and They Will Come? Us Regional Labor Composition \& Readiness to Meet Skill Demand Shocks from Chips and Science ↗ This paper directly addresses the core theme of skilled labor supply constraints by quantifying how quickly a regional workforce can adapt to technology-driven demand shocks from the CHIPS and Science Act. It provides a relevant empirical framework for analyzing talent supply lags and labor market adjustment frictions in the context of rapid industrial technological change. The CHIPS and Science Act has led to the announcement of at least 55,116 jobs in the Semiconductors and Electronics industry, representing a significant demand shock, often in regions without an incumbent semiconductor workforce. Many workers entering these roles, such as semiconductor processing technicians, will need to come from occupations that only partially match the skills required by the new demand for semiconductor production. We present an analytical methodology to quantify the potential stock and flow of talent from these partially matched occupations, to support a boundary analysis of labor market readiness to meet new demand. Our methods serve as a 'what-if analysis tool,'...	Elizaveta Gonchar, Christophe Combemale, Krishnan Ramayya
8	2022	Does Human Capital Expansion Improve Urban Innovation? Quasi-Experimental Evidence from China's Higher Education Expansion Policy ↗ The paper directly addresses the project's focus on human capital formation by providing quasi-experimental evidence that a sudden supply shock in higher education significantly boosts urban innovation, particularly in S&E fields. It offers critical empirical insights into how education systems influence the pace of adaptation to technological opportunities through mechanisms like talent agglomeration, which aligns with the study of directed technical change and skilled labor supply dynamics. This paper studies how the Chinese human capital expansion policy—the internationally exceptionally expanded enrollment in higher education—which served as an unprecedented, huge and sudden supply shock to prefecture-level cities—affects urban innovation. Using the standard difference-in-differences approach, we find that prefectures with a higher number of universities obtain a larger gain in urban innovation after 2003. More importantly, this study shows that the expansion of human capital in S&E; fields is playing the most major role in promoting urban innovation. It also shows that urban innovation of prefectures are particularly positive and affected by the HE expansion policy in...	Yian Chen, Guiping Li
8	2024	Inventor Returns and Mobility ↗ This paper directly investigates the mobility of skilled inventors and the associated wage premiums, which aligns with the project's focus on inventor mobility and entry cohort wage effects. It provides empirical evidence on how labor market frictions and firm-specific returns influence the allocation of specialized human capital across technology contexts. We show that firm and industry, rather than inventor and invention factors, explain more than half of the variation in inventor returns in administrative employer-inventor-patent linked data from Germany. Between-firm variation in inventive rents is strongly associated with inventor mobility. Inventors are more likely to make a move just before a patent is filed than shortly thereafter and benefit from their move through a mobility-related marginal inventor return. Employers that pay inventor returns in excess of the expected return gain a favorable position in the market for inventive labor with subsequent increases in patent quality and quantity. Consistent with theoretical arguments...	Dietmar Harhoff, David Heller, Paul P. Momtaz
8	2024	Inventors' Coworker Networks and Innovation ↗ This paper directly investigates the mobility of skilled inventors and how labor network connections facilitate the transfer of specialized human capital between firms. It provides empirical evidence on transition costs and the role of coworker networks in reallocating talent, which is central to understanding how labor supply adjusts during technological shifts. This paper presents direct evidence on how firms' innovation is affected by access to knowledgeable labor through co-worker network connections. We use a unique dataset that matches patent data to administrative employer - employee records from "Third Italy" - a region with many successful industrial clusters. Establishment closures displacing inventors generate supply shocks of knowledgeable labor to firms that employ the inventors' previous co-workers. We estimate event-study models where the treatment is the displacement of a "connected" inventor (i.e., a previous coworker of a current employee of the focal firm). We show that the displacement of a connected inventor significantly...	Sabrina Lucia Di Addario, Zhexin Feng, Michel Serafinelli
8	2025	Occupations, Human Capital Accumulation and Inequality ↗ [Title only] This title directly addresses the core themes of human capital accumulation and the resulting distributional effects, which are central to understanding how education and training costs shape labor supply. Although it does not explicitly mention technology shocks or specific innovation waves, the analysis of inequality through the lens of occupational human capital is highly relevant to the project's investigation of talent supply constraints and skill demand shifts. No abstract available.	Andrés Erosa, Luisa Fuster, Gueorgui Kambourov, et al.
8	2026	Pioneer Advantage as an Equilibrium Composite ↗ This paper directly addresses the project's focus on entry cohort wage premiums by providing a rigorous econometric framework to disentangle tenure effects from pure pioneering advantages in labor markets. Its insights into strategic entry timing and identification challenges are highly relevant for understanding how the timing of specialization within technology waves affects worker outcomes. A large empirical literature documents that early entrants outperform later ones, often interpreted as pioneering advantage. This paper asks what an entry-order coefficient identifies in a dynamic game with strategic entry. Tenure equals calendar time minus entry time, an accounting identity that creates an age--period--cohort colinearity. The novel obstruction is strategic: entry timing simultaneously determines rank and tenure, so any rank-shifting variable also shifts tenure, foreclosing the standard remedies. Reduced-state rank coefficients identify equilibrium composites mixing ordinal effects with tenure effects weighted by inter-entrant gaps. A calibrated simulation shows the bias is...	Nathan Yang
8	2024	Early Specialization in Higher Education and Labor Market Outcomes ↗ [Title only] This paper directly addresses the core theme of early talent supply and specialization timing, which is crucial for understanding how quickly skilled labor can adapt to technological shifts. It likely provides evidence on entry cohort effects and the costs associated with early human capital formation, offering insights into the flexibility of the labor supply curve. No abstract available.	Joseph Han, Jae-Yun Lee, Chamna Yoon

Score ↕	Year ↕	Title	Authors ↕	Theme ↕
10	2004	Innovating Firms and Aggregate Innovation core ↗ Seed paper — directly relevant by definition. We develop a parsimonious model of innovation to confront firm‐level evidence. It captures the dynamics of individual heterogeneous firms, describes the behavior of an industry with firm entry and exit, and delivers a general equilibrium model of technological change. While unifying the theoretical analysis of firms, industries, and the aggregate economy, the model yields insights into empirical work on innovating firms. It accounts for the persistence of firms’ R&D investment, the concentration of R&D among incumbents, the link between R&D and patenting, and why R&D as a fraction of revenues is positively correlated with firm productivity but not with firm size or growth.	Tor Jakob Klette, Samuel Kortum
10	2018	Innovation, Reallocation, and Growth core ↗ Seed paper — directly relevant by definition. We build a model of firm-level innovation, productivity growth, and reallocation featuring endogenous entry and exit. A new and central economic force is the selection between high- and low-type firms, which differ in terms of their innovative capacity. We estimate the parameters of the model using US Census microdata on firm-level output, R&D, and patenting. The model provides a good fit to the dynamics of firm entry and exit, output, and R&D. Taxing the continued operation of incumbents can lead to sizable gains (of the order of 1.4 percent improvement in welfare) by encouraging exit of less productive firms and freeing up skilled labor to be used for R&D by high-type incumbents...	Daron Acemoğlu, Ufuk Akcigit, Harun Alp, et al.
10	2014	Determinants of College Major Choice: Identification using an Information Experiment core ↗ Seed paper — directly relevant by definition. This article studies the determinants of college major choice using an experimentally generated panel of beliefs, obtained by providing students with information on the true population distribution of various major-specific characteristics. Students logically revise their beliefs in response to the information, and their subjective beliefs about future major choice are associated with beliefs about their own earnings and ability. We estimate a rich model of college major choice using the panel of beliefs data. While expected earnings and perceived ability are a significant determinant of major choice, heterogeneous tastes are the dominant factor in the choice of major. Analyses that ignore...	Matthew Wiswall, Basit Zafar
10	2008	An Empirical Model of Growth Through Product Innovation core ↗ Seed paper — directly relevant by definition. Productivity differences across firms are large and persistent, but the evidence for worker reallocation as an important source of aggregate productivity growth is mixed. The purpose of this paper is to estimate the structure of an equilibrium model of growth through innovation designed to identify and quantify the role of resource reallocation in the growth process. The model is a version of the Schumpeterian theory of firm evolution and growth developed by Klette and Kortum (2004) extended to allow for firm heterogeneity. The data set is a panel of Danish firms that includes information on value added, employment, and wages. The model's fit is good. The estimated model implies that more...	Rasmus Lentz, Dale T. Mortensen
10	2002	Technological Acceleration, Skill Transferability, and the Rise in Residual Inequality core ↗ Seed paper — directly relevant by definition. This paper provides a quantitative theory for the recent rise in residual wage inequality consistent with the empirical observation that a sizable part of this increase has a transitory nature, a feature that eludes standard models based on ex ante heterogeneity in ability. An acceleration in the rate of quality improvement of equipment, like the one observed from the early 1970s, increases the productivity/quality differentials across machines (jobs). In a frictional labor market, this force translates into higher wage dispersion even among ex ante equal workers. With vintage-human capital, the acceleration reduces workers' capacity to transfer skills from old to new machines, generating a...	Gianluca Violante
10	2020	Heterogeneous Markups, Growth, and Endogenous Misallocation core ↗ Seed paper — directly relevant by definition. Markups vary systematically across firms and are a source of misallocation. This paper develops a tractable model of firm dynamics where firms' market power is endogenous and the distribution of markups emerges as an equilibrium outcome. Monopoly power is the result of a process of forward‐looking, risky accumulation: firms invest in productivity growth to increase markups in their existing products but are stochastically replaced by more efficient competitors. Creative destruction therefore has pro‐competitive effects because faster churn gives firms less time to accumulate market power. In an application to firm‐level data from Indonesia, the model predicts that, relative to the United...	Michael Peters
10	1989	Quality Ladders in the Theory of Growth core ↗ Seed paper — directly relevant by definition. We develop a model of repeated product improvements in a continuum of sectors. Each product follows a stochastic progression up a quality ladder.	Gene M. Grossman, Elhanan Helpman
10	2017	The direction of innovation core ↗ Seed paper — directly relevant by definition. How do innovation policies affect the direction of research? Is market-based innovation too radical or too incremental? We construct a novel and tractable model of the direction of innovation. Firms pursue inefficient research directions because they race to discover easy yet less valuable projects and because they work on difficult inventions where they can appropriate a larger portion of the social value. Fixing these inefficiencies requires policy to condition on properties of inventions that could have been discovered but were not. Policies which do not do so, like patents and prizes, may fail to encourage firms to research in the efficient direction, even if they obtain the optimal...	Kevin A. Bryan, Jorge Lemus
10	2022	The Human Side of Structural Transformation core ↗ Seed paper — directly relevant by definition. We document that nearly half of the global decline in agricultural employment was driven by new cohorts entering the labor market. A new dataset of policy reforms supports an interpretation of these cohort effects as human capital. Using a model of frictional labor reallocation, we conclude that human capital growth led to a sharp decline in the agricultural labor supply, accounting, at fixed prices, for 40 percent of the decrease in agricultural employment. This aggregate effect is halved in general equilibrium and it reflects the role of human capital as both a mediating factor and an independent driver of labor reallocation. (JEL J22, J24, J43, L16, O13, O14, Q10)	Tommaso Porzio, Federico Rossi, Gabriella Santangelo
10	2021	On the Direction of Innovation core ↗ Seed paper — directly relevant by definition. How are resources allocated across different R&D areas (i.e., problems to be solved)? As a result of dynamic congestion externalities, the competitive market allocates excessive resources into those of high return, being those with higher private (and social) payoffs. Good problems are tackled too soon, and as a result the distribution of open research problems in the socially optimal solution stochastically dominates that of the competitive equilibrium. A severe form of rent dissipation occurs in the latter, where the total value of R&D activity equals the value of allocating all resources to the least valuable problem solved. Resulting losses can be substantial.	Hugo A. Hopenhayn, Francesco Squintani
10	2018	STEM Careers and Technological Change core Seed paper — directly relevant by definition. Science, Technology, Engineering, and Math (STEM) jobs are a key contributor to economic growth and national competitiveness. Yet STEM workers are perceived to be in short supply. This paper shows that the “STEM shortage” phenomenon is explained by technological change, which introduces new job tasks and makes old ones obsolete. We find that the initially high economic return to applied STEM degrees declines by more than 50 percent in the first decade of working life. This coincides with a rapid exit of college graduates from STEM occupations. Using detailed job vacancy data, we show that STEM jobs changed especially quickly over the last decade, leading to flatter age-earnings profiles as...	David Deming, Kadeem Noray
10	2020	Technological Innovation and Labor Income Risk core ↗ Seed paper — directly relevant by definition. Using administrative data from the United States, we document novel stylized facts regarding technological innovation and the riskiness of labor income. Higher rates of industry innovation are associated with significant increases in labor earnings for top workers. Decomposing this result, we find that own firm innovation is associated with a modest increase in the mean, but also variance, of worker earnings growth. Innovation by competing firms is related to lower, and more negatively skewed, future earnings. We construct a structural model featuring creative destruction and displacement of human capital that replicates these patterns. In the model, higher rates of innovation by competing...	Leonid Kogan, Dimitris Papanikolaou, Lawrence Schmidt, et al.
10	2020	Industry Fluctuations and College Major Choices: Evidence from an Energy Boom and Bust core ↗ Seed paper — directly relevant by definition. Abstract This paper examines how college students in the United States altered their college majors during the energy boom and bust of the 1970s and 1980s. We focus on petroleum engineering and geology, two majors closely related to the energy industry. We find strong evidence that the energy boom increased the prevalence of these two energy-related majors and the energy bust lowered the prevalence of these majors. Effects are particularly strong for young people born in energy intensive states. Thus, college major decisions responded to industry fluctuations with important location-specific effects consistent with frictions to migration and information flows.	Luyi Han, John V. Winters
10	2024	Fast and Slow Technological Transitions core ↗ Seed paper — directly relevant by definition. Do economies adjust slowly to certain technological innovations and more rapidly to others? We argue that the adjustment is slower when innovations mainly benefit production activities requiring skills that are more different from those used in the rest of the economy. When such skill specificity is stronger, the adjustment of labor markets is driven less by the fast reallocation of older incumbent workers and more by the gradual entry of younger generations. We first document that the US labor market adjusted differently to early twentieth-century manufacturing innovations than to recent information and communication technologies (ICTs). We then build an overlapping-generations model of...	Rodrigo Adão, Martin Beraja, Nitya Pandalai-Nayar
10	2018	PATENTABILITY, R&D DIRECTION, AND CUMULATIVE INNOVATION core ↗ Seed paper — directly relevant by definition. Abstract We present a model where firms conduct R&D in both a safe and a risky direction. As patentability standards rise, an innovation in the risky direction is less likely to receive a patent, which decreases the static incentive for new entrants to conduct risky R&D but can increase their dynamic incentive. These, together with a strategic substitution and a market structure effect, result in an inverted‐U shape in the risky direction but a U shape in the safe direction for the relationship between R&D intensity and patentability standards. R&D is biased toward (against) the risky direction under lower (higher) standards.	Yongmin Chen, Shiyuan Pan, Tianle Zhang
10	2021	Innovation Networks and R&D Allocation core ↗ Seed paper — directly relevant by definition. We study the cross-sector allocation of R&D resources in a multisector growth model with an innovation network, where one sector's past innovations may benefit other sectors' future innovations.Theoretically, we solve for the optimal allocation of R&D resources.We show a planner valuing long-term growth should allocate more R&D toward central sectors in the innovation network, but the incentive is muted in open economies that benefit more from foreign knowledge spillovers.We derive sufficient statistics for evaluating the welfare gains from improving R&D allocation.Empirically, we build the global innovation network based on patent citations and establish its empirical importance for...	Ernest Liu, Song Ma
10	2020	Biased technological change and employment reallocation core ↗ Seed paper — directly relevant by definition. To study the drivers of the employment reallocation across sectors and occupations between 1960 and 2010 in the US we propose a model where technology evolves at the sector-occupation cell level. This framework allows us to quantify the bias of technology across sectors and across occupations. We implement a novel method to extract changes in sector-occupation cell productivities from the data. Using a factor model we find that occupation and sector factors jointly explain 74-87 percent of cell productivity changes, with the occupation component being by far the most important. While in our general equilibrium model both factors imply similar reallocations of labor across sectors and...	Zsófia Bárány, Christian Siegel
10	2021	The demand for AI skills in the labor market core ↗ Seed paper — directly relevant by definition. Using detailed data on skill requirements in online vacancies, we estimate the demand for AI specialists across occupations, sectors, and firms. We document a dramatic increase in the demand for AI skills over 2010–2019 in the U.S. economy across most industries and occupations. The demand is highest in IT occupations, followed by architecture and engineering, scientific, and management occupations. Firms with larger market capitalization, higher cash holdings, and higher investments in R&D have a higher demand for AI skills. We also document a wage premium of 11% for job postings that require AI skills within the same firm and 5% within the same job title. Managerial occupations have the...	Liudmila Alekseeva, José Azar, Mireia Giné, et al.
10	2025	The IT Boom and Other Unintended Consequences of Chasing the American Dream core ↗ Seed paper — directly relevant by definition. With the majority of all H-1B visas going to Indians, we study how US immigration policy coupled with the internet boom affected both the US and Indian economies, and in particular both countries’ IT sectors. The H-1B scheme led to a tech boom in both countries, inducing substantial gains in firm productivity and consumer welfare in both the United States and India. We find that the US-born workers gained $431 million in 2010 as a result of the H-1B scheme. In India, the H-1B program induced Indians to switch to computer science (CS) occupations, increasing the CS workforce and raising overall IT output in India by 5 percent. Indian students enrolled in engineering schools to gain...	Gaurav Khanna, Nicolas Morales, Federal Reserve Bank of Richmond
10	2025	Measuring the characteristics and employment dynamics of U.S. inventors core ↗ Seed paper — directly relevant by definition. Innovation is a key driver of long-run economic growth. Studying innovation requires a clear view of the characteristics and behavior of the individuals who create new ideas. A general lack of rich, large-scale data has constrained such analyses. We address this by introducing a new dataset linking patent inventors to survey, census, and administrative microdata at the U.S. Census Bureau. We use this data to provide a first look at the demographic characteristics, employer characteristics, earnings, and employment dynamics of inventors. These linkages, which will be available to researchers with approved access, dramatically increase the scope of what can be learned about inventors and...	Ufuk Akcigit, Nathan Goldschlag
10	2025	Field Choice, Skill Specificity, and Labor Market Disruptions core ↗ Seed paper — directly relevant by definition. We argue that college students' field-of-study choices significantly influence how economies respond to labor market disruptions.To do so, we develop and estimate a framework featuring forward-looking students who choose a field of study when entering college, and subsequently make decisions over occupations after graduating and entering the labor market.Different fields endow workers with distinct comparative advantages and varying costs associated with switching occupations.Simulating both a trade war and wide scale adoption of AI, we use our model to make three points.First, relative to models that ignore how new cohorts adjust their field-of-study choices, our framework predicts larger...	Valérie Smeets, Lin Tian, Sharon Traiberman
10	2024	Embracing the Future or Building on the Past? Growth with New and Old Technologies core ↗ Seed paper — directly relevant by definition. Is growth driven by the emergence of new paradigms or mostly through the perfection of existing technologies? And is the allocation of research effort between emerging technologies versus established ones efficient? To study these questions, I propose a new semi-endogenous growth model that incorporates technology vintages and the endogenous evolution of multiple technological paradigms through directed innovation. Despite the fact that technologies continuously emerge, making the state space unbounded, the model is remarkably tractable, allowing me to provide a comprehensive characterization of both the balanced growth equilibrium and the transitional dynamics. From a positive perspective...	Bernardo Ribeiro
10	2025	Dissertation Paths: Advisors and Students in the Economics Research Production Function core ↗ Seed paper — directly relevant by definition. Elite economics PhD programs aim to train graduate students for a lifetime of academic research. This paper asks how advising affects graduate students' post-PhD research productivity. Advising is highly concentrated: at the eight highly-selective schools in our study, a minority of advisors do most of the advising work. We quantify advisor attributes such as an advisor's own research output and aspects of the advising relationship like coauthoring and research field affinity that might contribute to student research success. Students advised by research-active, prolific advisors tend to publish more, while coauthoring has no effect. Student-advisor research affinity also predicts student...	Joshua D. Angrist, Marc Diederichs
8	2019	Who Becomes an Inventor in America? The Importance of Exposure to Innovation core [Title only] This paper directly addresses the talent supply constraints and human capital formation aspects of the project by analyzing the determinants of becoming an inventor. It provides insights into the entry cohort effects and early-life factors that shape the pipeline of specialized labor available for technological innovation. No abstract available.	Bell, Chetty, Jaravel, et al.	Other
7	2009	Mobility, Skills, and the Michigan Non-Compete Experiment core ↗ This paper directly addresses the project's theme of inventor mobility and transition costs by empirically demonstrating how institutional barriers affect the movement of specialized labor. It provides relevant evidence on the frictions that constrain skilled labor supply and the specific vulnerability of firm-specific human capital during technological or industrial shifts. Whereas a number of studies have considered the implications of employee mobility, comparatively little research has considered institutional factors governing the ability of employees to move from one firm to another. This paper explores a legal constraint on mobility—employee non-compete agreements—by exploiting Michigan's apparently inadvertent 1985 reversal of its non-compete enforcement policy as a natural experiment. Using a differences-in-differences approach, and controlling for changes in the auto industry central to Michigan's economy, we find that the enforcement of non-competes indeed attenuates mobility. Moreover, non-compete enforcement decreases mobility more sharply for...	Matt Marx, Deborah Strumsky, Lee Fleming
6	1992	A Model of Growth Through Creative Destruction core ↗ This paper develops a model based on Schumpeter's process of creative destruction. It departs from existing models of endogenous growth in emphasizing obsolescence of old technologies induced by the accumulation of knowledge and the resulting process or industrial innovations. This has both positive and normative implications for growth. In positive terms, the prospect of a high level of research in the future can deter research today by threatening the fruits of that research with rapid obsolescence. In normative terms, obsolescence creates a negative externality from innovations, and hence a tendency for laissez-faire economies to generate too many innovations, i.e too much growth. This...	Philippe Aghion, Peter Howitt
6	2009	OCCUPATIONAL SPECIFICITY OF HUMAN CAPITAL* core ↗ The paper provides relevant background by establishing that human capital is occupation-specific, which implies high switching costs and slow adjustment of skilled labor supply across different technology domains. This supports the project's premise that training takes time and creates frictions, although it does not directly analyze technology-driven shifts or innovation dynamics. We find that returns to occupational tenure are substantial. Everything else being constant, 5 years of occupational tenure are associated with an increase in wages of 12%–20%. Moreover, when occupational experience is taken into account, tenure with an industry or employer has relatively little importance in accounting for the wage one receives. This finding is consistent with human capital being occupation specific.	Gueorgui Kambourov, Iourii Manovskii
6	2010	How General Is Human Capital? A Task-Based Approach core [Title only] This paper directly addresses the core theme of skilled labor supply flexibility by using a task-based framework to quantify the transferability of human capital across different technologies. It provides a theoretical foundation for understanding the frictions and costs associated with labor adaptation to technological shifts, which is central to the project's inquiry. No abstract available.	Gathmann, Schonberg
5	2015	The Great Reversal in the Demand for Skill and Cognitive Tasks core ↗ This paper provides relevant background by documenting how shifts in technology and demand for cognitive tasks drive labor market outcomes and displacement between skill groups. However, it focuses on historical labor reallocation and displacement rather than the specific constraints, timing, and training costs associated with skilled labor supply elasticity and entry cohort effects during rapid technological waves like AI. This paper argues that several of the poor labor market outcomes observed in the Great Recession can be traced back to a change in the demand pattern for skilled workers that started with the tech bust of 2000. In particular, we show that around the year 2000, the demand for cognitive tasks underwent a reversal. In response, high-skilled workers moved down the occupational ladder and increasingly displaced lower-educated workers in less skill-intensive jobs. While these effects were present before the financial crisis of 2008, they became more obvious after jobs associated with the housing bubble disappeared.	Paul Beaudry, David A. Green, Benjamin Sand
10	1998	Adjusting to a New Technology: Experience and Training ↗ This paper directly addresses the project's core theme by explicitly modeling the time lags and initial slowdowns in labor supply adjustment caused by the education and training requirements of new technologies. It provides a theoretical framework for how technology-specific human capital formation constrains the immediate response of skilled labor to technological shifts, which is central to understanding talent supply constraints during rapid innovation waves. How does the economy react to the arrival of a new major technology? The existing literature on general-purpose technologies (GPTs) has studied the role that mechanisms like secondary innovations, diffusion, and learning by firms play in the adjustment process. By contrast, we focus on a new mechanism: the interplay between technological change and two types of human capital—technology-specific experience and education. We show that technological change that requires more education and training, like computerization, necessarily produces an initial slowdown. On the other hand, technological change that lowers the training requirements, like the move from the artisan shop to the factory, can...	Elhanan Helpman, Antonio Rangel
10	2025	Demographics and Technology Adoption ↗ This paper directly addresses the project's core themes by modeling how technology-specific human capital creation creates entry cohort effects and skill scarcity during technological waves. It explicitly examines the time lag in labor supply adaptation and the resulting impact on growth and innovation incentives, aligning perfectly with the focus on directed technical change and talent supply constraints. I study the impact of labor force composition on technology adoption and asset prices. In this regard, I document a wage gap between recent labor market entrants and incumbent skilled workers that comoves with aggregate productivity growth, innovation intensity, and valuation spreads. These patterns imply large, predictable growth opportunities concentrated in new technology firms, along with skill scarcity favoring new labor. Accordingly, I construct an endogenous growth model with a labor cohort effect: technological waves arrive at random times, and only cohorts born after the arrival of a wave have skills that are complementary to the new technology. Structural declines in the supply of...	Zeshu Xu
9	2018	The Race between Man and Machine: Implications of Technology for Growth, Factor Shares, and Employment ↗ This paper directly addresses directed technical change by endogenizing the direction of innovation toward automation versus task creation, and examines how these competing innovation directions affect labor demand and employment across skill levels. It also explores heterogeneous skill effects and inequality during technological transitions, which is central to understanding how talent supply constraints and skill-biased technical change interact with innovation incentives. We examine the concerns that new technologies will render labor redundant in a framework in which tasks previously performed by labor can be automated and new versions of existing tasks, in which labor has a comparative advantage, can be created. In a static version where capital is fixed and technology is exogenous, automation reduces employment and the labor share, and may even reduce wages, while the creation of new tasks has the opposite effects. Our full model endogenizes capital accumulation and the direction of research toward automation and the creation of new tasks. If the long-run rental rate of capital relative to the wage is sufficiently low, the long-run equilibrium involves...	Daron Acemoğlu, Pascual Restrepo
9	1998	Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality ↗ This paper directly addresses directed technical change in response to skilled labor supply, examining how the availability of skilled workers shapes the direction of innovation toward skill-complementary technologies—a core mechanism in the project. It also analyzes the dynamic interplay between human capital formation (college graduate supply) and technological change, demonstrating how education policy affects innovation incentives and labor market outcomes over time. A high proportion of skilled workers in the labor force implies a large market size for skill-complementary technologies, and encourages faster upgrading of the productivity of skilled workers. As a result, an increase in the supply of skills reduces the skill premium in the short run, but then it induces skill-biased technical change and increases the skill premium, possibly even above its initial value. This theory suggests that the rapid increase in the proportion of college graduates in the United States labor force in the 1970s may have been a causal factor in both the decline in the college premium during the 1970s and the large increase in inequality during the 1980s.	Daron Acemoğlu
9	2002	Directed Technical Change ↗ This paper directly addresses directed technical change and the forces determining factor bias (price effects vs. market size effects), which is central to understanding how innovation responds to skilled labor supply constraints. It explicitly analyzes skill-biased technical change and the relationship between factor supplies and innovation direction, core themes in the research project's examination of how education and training costs shape innovation pathways and labor demand. For many problems in macroeconomics, development economics, labour economics, and international trade, whether technical change is biased towards particular factors is of central importance. This paper develops a simple framework to analyse the forces that shape these biases. There are two major forces affecting equilibrium bias: the price effect and the market size effect. While the former encourages innovations directed at scarce factors, the latter leads to technical change favouring abundant factors. The elasticity of substitution between different factors regulates how powerful these effects are, determining how technical change and factor prices respond to changes in relative...	Daron Acemoğlu
9	2010	The Race between Education and Technology ↗ [Title only] The title directly addresses the core project theme of the dynamic interaction between human capital formation and technological change, specifically highlighting the timing and speed of adaptation. It strongly suggests an analysis of how education systems respond to or lag behind technology-driven shifts in demand, which is central to the researcher's inquiry into talent supply constraints. No abstract available.	Claudia Goldin, Lawrence F. Katz
9	2008	The Burden of Knowledge and the “Death of the Renaissance Man”: Is Innovation Getting Harder? ↗ This paper directly addresses how education and training costs constrain skilled labor supply and innovation capacity, examining how the burden of knowledge affects the pace at which innovators can adapt to technological opportunities. It provides empirical evidence on specialization, training duration, and teamwork—core mechanisms through which education systems shape the flexibility and direction of innovation—and develops a growth model linking these labor supply constraints to aggregate innovation outcomes. This paper investigates a possibly fundamental aspect of technological progress. If knowledge accumulates as technology advances, then successive generations of innovators may face an increasing educational burden. Innovators can compensate through lengthening educational phases and narrowing expertise, but these responses come at the cost of reducing individual innovative capacities, with implications for the organization of innovative activity—a greater reliance on teamwork—and negative implications for growth. Building on this “burden of knowledge” mechanism, this paper first presents six facts about innovator behaviour. I show that age at first invention, specialization, and teamwork...	Benjamin F. Jones
9	1998	Technology and Changes in Skill Structure: Evidence from Seven OECD Countries ↗ This paper directly examines the relationship between technological change (measured by R&D intensity) and skill-biased technical change across multiple countries, providing empirical evidence on how innovation drives demand for skilled labor. It is highly relevant to understanding the mechanisms through which technology shapes labor demand and the need for skilled worker supply to respond to directional innovation patterns. This paper compares the changing skill structure of wage bills and employment in the United States with six other OECD countries (Denmark, France, Germany, Japan, Sweden, and the United Kingdom). We investigate whether a directly observed measure of technical change (R&D intensity) is closely linked to the growth in the importance of more highly skilled workers which has occurred in all countries. Evidence of a significant association between skill upgrading and R&D intensity is uncovered in all seven countries. These results provide evidence that skill-biased technical change is an international phenomenon that has had a clear effect of increasing the relative demand for skilled workers.	Stephen Machin, John Van Reenen
9	1964	Induced Bias in Innovation and the Theory of Distribution ↗ This seminal paper on induced bias in innovation directly addresses how factor costs (including labor costs) shape the direction of technological change, a core theme of the project. The theory explains how wage pressures and labor supply constraints can induce innovation in labor-saving or labor-using directions, central to understanding how training costs affect the trajectory of innovation and skilled labor demand. Journal Article Induced Bias in Innovation and the Theory of Distribution Get access Charles Kennedy Charles Kennedy University of the West Indies, Mona, Jamaica Search for other works by this author on: Oxford Academic Google Scholar The Economic Journal, Volume 74, Issue 295, 1 September 1964, Pages 541–547, https://doi.org/10.2307/2228295 Published: 01 September 1964	Charles H. Kennedy
9	2021	Demographics and Automation ↗ This paper directly addresses directed technical change in response to labor supply constraints, examining how demographic shifts (aging) alter innovation direction toward automation technologies. It provides both theoretical modeling and empirical evidence of how labor market frictions shape innovation incentives, a core mechanism in the project's framework of technology-driven demand meeting constrained talent supply. Abstract We argue theoretically and document empirically that aging leads to greater (industrial) automation, because it creates a shortage of middle-aged workers specializing in manual production tasks. We show that demographic change is associated with greater adoption of robots and other automation technologies across countries and with more robotics-related activities across U.S. commuting zones. We also document more automation innovation in countries undergoing faster aging. Our directed technological change model predicts that the response of automation technologies to aging should be more pronounced in industries that rely more on middle-aged workers and those that present greater...	Daron Acemoğlu, Pascual Restrepo
9	2018	Who Becomes an Inventor in America? The Importance of Exposure to Innovation* ↗ This paper directly addresses how talent supply and human capital formation are shaped by exposure to innovation and environmental factors, examining barriers to skilled labor entry in innovation-driven fields. It demonstrates that training/exposure to innovation during education significantly influences who becomes an inventor, revealing constraints on talent supply that align with the project's focus on how education systems affect labor market adjustment to technological change. We characterize the factors that determine who becomes an inventor in the United States, focusing on the role of inventive ability (“nature”) versus environment (“nurture”). Using deidentified data on 1.2 million inventors from patent records linked to tax records, we first show that children's chances of becoming inventors vary sharply with characteristics at birth, such as their race, gender, and parents' socioeconomic class. For example, children from high-income (top 1%) families are 10 times as likely to become inventors as those from below-median income families. These gaps persist even among children with similar math test scores in early childhood-which are highly predictive of...	Alex Bell, Raj Chetty, Xavier Jaravel, et al.
9	1991	Vintage Human Capital, Growth, and the Diffusion of New Technology ↗ This paper directly addresses how vintage-specific human capital skills create lags between technological innovation and peak usage, which is central to understanding talent supply constraints during technological change. The model's focus on how education and training for new technologies shape diffusion rates and the distribution of skilled workers across technology vintages directly engages with the project's core concern about training time and labor supply responsiveness to innovation. The authors develop a model of vintage human capital in which each technology requires vintage-specific skills. They examine the properties of a stationary equilibrium for their economy. The stationary equilibrium is characterized by an endogenous distribution of skilled workers across vintages. The distribution is shown to be single-peaked. Under general conditions, there is a lag between the appearance of a technology and its peak usage, a phenomenon known as diffusion. An increase in the rate of exogenous technological change shifts the distribution of human capital to more recent vintages, thereby increasing the diffusion rate. Copyright 1991 by University of Chicago Press.	V. V. Chari, Hugo A. Hopenhayn
9	2010	When Does Labor Scarcity Encourage Innovation? ↗ This paper directly addresses how labor market conditions (scarcity) shape the direction of innovation, examining whether technological advances are labor-saving versus labor-complementary—a core theme of directed technical change and innovation incentives. It explores how talent supply constraints influence R&D allocation and innovation outcomes, which is central to understanding how education and training systems affect the pace of technological adaptation. This paper studies whether labor scarcity encourages technological advances, that is, technology adoption or innovation, for example, as claimed by Habakkuk in the context of nineteenth-century United States. I define technology as strongly labor saving if technological advances reduce the marginal product of labor and as strongly labor complementary if they increase it. I show that labor scarcity encourages technological advances if technology is strongly labor saving and will discourage them if technology is strongly labor complementary. I also show that technology can be strongly labor saving in plausible environments but not in many canonical macroeconomic models.	Daron Acemoğlu
9	2003	A Theory of Defensive Skill-Biased Innovation and Globalization ↗ This paper directly addresses directed technical change and how firms endogenously bias innovation toward skill-intensive technologies in response to competitive threats, which is core to understanding how innovation direction shapes skilled labor demand. It explicitly connects innovation incentives to skill-biased technical change and wage inequality outcomes, directly relevant to the project's focus on how innovation direction and skilled labor supply interact. This paper considers a dynamic model of innovations in which firms can endogenously bias the direction of technological change. Both in a North–North and North–South context, we show that, when globalization triggers an increased threat of technological leapfrogging or imitation, firms tend to respond to that threat by biasing the direction of their innovations towards skilled-labor-intensive technologies. We show that this process of defensive skill-biased innovations generates an increase in wage inequalities in both regions. We then discuss suggestive empirical evidence of the existence of defensive skill-biased technical change.	Mathias Thoenig, Thierry Verdier
9	2021	The Rise of the Machines: Automation, Horizontal Innovation, and Income Inequality ↗ We build an endogenous growth model with automation (the replacement of low-skill workers with machines) and horizontal innovation (the creation of new products). Over time, the share of automation innovations endogenously increases through an increase in low-skill wages, leading to an increase in the skill premium and a decline in the labor share. We calibrate the model to the US economy and show that it quantitatively replicates the paths of the skill premium, the labor share, and labor productivity. Our model offers a new perspective on recent trends in the income distribution by showing that they can be explained endogenously. (JEL D31, E25, J24, J31, O33, O41)	David Hémous, Morten Olsen
9	2022	Higher education and corporate innovation ↗ This paper directly examines how education supply—specifically the expansion of college-educated labor—shapes firms' capacity for innovation and technological change, addressing core themes of skilled labor supply constraints and human capital formation. The causal evidence on how education expansion enables innovation outcomes provides empirical grounding for understanding how talent supply affects the direction and pace of technological development. This paper investigates the impact of higher education on corporate innovation. To establish causality, we exploit a policy-induced exogenous shock in the supply of Chinese college-educated labor starting in 2003. Using a difference-in-differences approach, we find that Chinese firms in skilled industries generate better innovation outcomes as measured by patents and citations than those in unskilled industries. This effect is more pronounced among firms headquartered in a province with more science and engineering college graduates, young firms that are more likely to hire young graduates, and firms located near universities. Moreover, higher education expansion increases a firm's...	Dongmin Kong, Bohui Zhang, Jian Zhang
9	2010	Competing engines of growth: Innovation and standardization ↗ This paper directly addresses how innovation drives demand for skilled labor and the dynamic process by which new goods transition from requiring skilled workers to being producible by unskilled labor, which is central to understanding skilled labor supply constraints and the pace of labor market adjustment to technological change. The framework's focus on standardization as a mechanism that converts skill-demanding innovation into unskilled-labor production relates directly to the project's core concern with how training and adaptation systems affect the speed of technological diffusion and labor supply response. We study a dynamic general equilibrium model where innovation takes the form of the introduction of new goods whose production requires skilled workers. Innovation is followed by a costly process of standardization, whereby these new goods are adapted to be produced using unskilled labor. Our framework highlights a number of novel results. First, standardization is both an engine of growth and a potential barrier to it. As a result, growth is an inverse U-shaped function of the standardization rate (and of competition). Second, we characterize the growth and welfare maximizing speed of standardization. We show how optimal protection of intellectual property rights affecting the cost of...	Daron Acemoğlu, Gino Gancia, Fabrizio Zilibotti
9	2005	Building the Stock of College-Educated Labor ↗ This paper directly addresses how education costs affect human capital formation and the supply of skilled labor, examining tuition subsidies as a policy lever for increasing college completion rates. It provides empirical evidence on the relationship between training costs and labor supply flexibility, a core concern of the project regarding how education systems affect the pace of adaptation to skill demand shifts. Half of college students drop out before completing a degree. These low rates of college completion among young people should be viewed in the context of slow future growth in the educated labor force, as the well-educated baby boomers retire and new workers are drawn from populations with historically low education levels. This paper establishes a causal link between college costs and the share of workers with a college education. I exploit the introduction of two large tuition subsidy programs, finding that they increase the share of the population that completes a college degree by three percentage points. The effects are strongest among women, with white women increasing degree receipt...	Susan Dynarski
9	2019	Innovation, automation, and inequality: Policy challenges in the race against the machine ↗ The effects of automation on economic growth, education, and inequality are analyzed using an R&D-driven growth model with endogenous education in which high-skilled workers are complements to machines and low-skilled workers are substitutes for machines. The model predicts that automation leads to an increasing share of college graduates, increasing income and wealth inequality, and a declining labor share. We show that standard policy suggestions for the age of automation can trigger unintended side effects on inequality, growth, and welfare, irrespective of whether they are financed by progressive wage taxation or by a robot tax.	Klaus Prettner, Holger Strulik
9	2004	Growth, distance to frontier and composition of human capital ↗ This paper directly addresses how the composition and allocation of human capital between innovation and imitation activities affects growth, with explicit focus on skill-intensity differences across these channels—a core theme of directed technical change. The theoretical model examining skilled labor's differential contribution to growth depending on technological distance and the empirical validation using OECD panel data provides crucial insights into how education systems shape innovation incentives and labor demand patterns. We examine the contribution of human capital to economy-wide technological improvements through the two channels of innovation and imitation. We develop a theoretical model showing that skilled labor has a higher growth-enhancing effect closer to the technological frontier under the reasonable assumption that innovation is a relatively more skill-intensive activity than imitation. Also, we provide evidence in favor of this prediction using a panel dataset covering 19 OECD countries between 1960 and 2000 and explain why previous empirical research had found no positive relationship between initial schooling level and subsequent growth in rich countries.	Jérôme Vandenbussche, Philippe Aghion, Costas Meghir
9	2015	Necessity Is the Mother of Invention: Input Supplies and Directed Technical Change ↗ This paper directly addresses how input supply shocks drive the direction of technological innovation, a core theme of the project's examination of how market conditions shape innovation trajectories. It provides causal empirical evidence for directed technical change theory, demonstrating how relative factor availability influences which technologies are developed—precisely the mechanism underlying the project's analysis of how demand for specialized skills affects R&D allocation and innovation direction. This study provides causal evidence that a shock to the relative supply of inputs to production can (1) affect the direction of technological progress and (2) lead to a rebound in the relative price of the input that became relatively more abundant (the strong induced-bias hypothesis). I exploit the impact of the U.S. Civil War on the British cotton textile industry, which reduced supplies of cotton from the Southern United States, forcing British producers to shift to lower-quality Indian cotton. Using detailed new data, I show that this shift induced the development of new technologies that augmented Indian cotton. As these new technologies became available, I show that the relative price...	W. Walker Hanlon
9	2008	Building the Stock of College-Educated Labor ↗ This paper directly addresses how education costs affect the supply of skilled labor by establishing a causal link between tuition subsidies and college completion rates, demonstrating that financial barriers shape human capital formation and the stock of educated workers. It is highly relevant to understanding how education system design and training costs constrain talent supply, which is central to the project's examination of labor supply flexibility and adjustment to technological demand shifts. Half of college students drop out before completing a degree. These low rates of college completion among young people should be viewed in the context of slow future growth in the educated labor force, as the well-educated baby boomers retire and new workers are drawn from populations with historically low education levels. This paper establishes a causal link between college costs and the share of workers with a college education. I exploit the introduction of two large tuition subsidy programs, finding that they increase the share of the population that completes a college degree by three percentage points. The effects are strongest among women, with white women increasing degree receipt...	Susan Dynarski
9	1999	Endogenous Technological Change and Wage Inequality ↗ This paper directly addresses endogenous technological change and how the distribution of absorptive capacities—the rate at which technology-specific skills can be acquired—affects innovation direction and wage inequality, which is central to understanding how training costs and labor supply constraints shape technology adoption. The framework explicitly connects skilled labor supply constraints to R&D allocation and productivity outcomes, core themes of the research project. Although microeconomic studies find a positive relationship between R&D and skill premia, much of the recent rise in U.S. wage inequality was accompanied by slowing labor-productivity growth and relatively slow introduction of new technologies. These conflicting observations are consistent with the effects of a skewed distribution of “absorptive capacities”—the rate at which technology-specific skills can be acquired—in a model of endogenous technological change. The framework is used to assess whether the productivity slowdown and the rise in wage inequality can be jointly accounted for by the contemporaneous decline in the growth rate of labor quality. (JEL E24, J31, O3)	Huw Lloyd‐Ellis
9	2018	Paradise of Novelty—Or Loss of Human Capital? Exploring New Fields and Inventive Output ↗ This paper directly addresses the project's focus on cross-technology switching costs and inventor mobility by examining the trade-offs between exploring new fields and maintaining inventive value. It provides empirical evidence on how specialized knowledge and collaboration mitigate the learning challenges associated with transitioning between technology domains, which is central to understanding talent supply constraints during technological shifts. Does a person become more or less creative when exploring a new field? Exploring new fields exposes a person to new knowledge that might increase the novelty of inventive output; at the same time, exploration means a lack of prior expertise and a learning challenge that might harm the value of that output. Using new combinations as a measure of novelty and citations as a measure of value, we demonstrate correlations between exploring new fields and increased novelty—but decreased value—in an inventor–firm fixed effects panel. The negative effect of exploring new fields on value is muted when the novice collaborates with experts or uses the scientific literature in the new field. We find...	Sam Arts, Lee Fleming
9	2015	Localised and Biased Technologies: Atkinson and Stiglitz's New View, Induced Innovations, and Directed Technological Change ↗ This paper directly engages with directed technological change theory and induced innovation, both central to understanding how innovation direction responds to factor costs and labor supply constraints. It provides foundational theoretical frameworks for analyzing how technology adapts to skilled labor availability and training costs, making it highly relevant to the project's core theme of direction of innovation and technology-skill complementarity. This study revisits the important ideas proposed by Atkinson and Stiglitz's seminal 1969 paper on technological change. After linking these ideas to the induced innovation literature of the 1960s and the more recent directed technological change literature, it explains how these three complementary but different approaches are useful in the study of a range of current research areas – though they may also yield different answers to important questions. It concludes by highlighting several important areas where these ideas can be fruitfully applied in future work. Atkinson, A.B. and Stiglitz, J.E. (1969). 'A new view of technological change', Economic Journal, vol. 79(315), pp. 573–8.	Daron Acemoğlu
9	2021	Skill-Biased Structural Change ↗ This paper directly examines how sectoral shifts driven by development systematically increase demand for skilled labor and analyzes the technical change mechanisms underlying skill premium growth. It is core to understanding how innovation direction and structural transformation shape skilled labor demand, a central concern of the project regarding talent supply constraints and labor market adjustment lags. Abstract Using a broad panel of advanced economies, we document that increases in GDP per capita are associated with a systematic shift in the composition of value added to sectors that are intensive in high-skill labour, a process we label as skill-biased structural change. It follows that further development in these economies leads to an increase in the relative demand for skilled labour. We develop a quantitative two-sector model of this process as a laboratory to assess the sources of the rise of the skill premium in the U.S. and a set of ten other advanced economies, over the period 1977 to 2005. For the U.S., we find that the sector-specific skill neutral component of technical...	Francisco Buera, Joseph P. Kaboski, Richard Rogerson, et al.
9	2005	Immigration, Skill Mix, and the Choice of Technique ↗ This paper directly addresses how labor supply composition (skill mix) affects firms' technology adoption choices, demonstrating that skill availability drives the direction of technical change rather than vice versa—a core mechanism in the project's framework of directed innovation constrained by talent supply. The findings on technology adoption lags and skill-driven innovation direction are highly relevant to understanding how labor market conditions shape innovation trajectories and the pace of technological diffusion. Using detailed plant-le vel data from the 1988 and 1993 Surveys of Manufacturing Technology, this paper examines the impact of skill mix in U.S. local labor markets on the use and adoption of automation technologies in manufacturing.The level of automation differs widely across U.S. metropolitan areas.In both 1988 and 1993, in markets with a higher relative availability of lessskilled labor, comparable plants -even plants in the same narrow (4-digit SIC) industries -used systematically less automation.Moreover, between 1988 and 1993 plants in areas experiencing faster less-skilled relative labor supply growth adopted automation technology more slowly, both overall and relative to...	Ethan Lewis
9	2016	Human Capital Investment, Inequality, and Economic Growth ↗ This paper directly addresses how human capital investment constraints affect skilled labor supply in response to skill-biased technical change, examining the lag between demand for skills and actual human capital formation—a core concern of the project. It explicitly models the trade-offs in human capital acquisition and how these constraints amplify inequality and constrain growth during periods of technological change. We treat rising inequality as an equilibrium outcome in which human capital investment fails to keep pace with rising demand for skills. Investment affects skill supply and prices on three margins: the type of human capital in which to invest, how much to acquire, and the intensity of use. The latter two represent the intensive margins of human capital acquisition and utilization. These choices are substitutes for the creation of new skilled workers, yet they are complementary with each other, magnifying inequality. When skill-biased technical change drives economic growth, greater inequality reduces growth.	Kevin Murphy, Robert Topel
9	2023	Distorted Innovation: Does the Market Get the Direction of Technology Right? ↗ This paper directly addresses the direction of innovation and how market distortions affect which technologies are developed, which is central to the project's focus on directed technical change and innovation incentives. The framework examining how innovation direction responds to economic conditions is highly relevant to understanding whether technology-driven labor demand shifts could alternatively target skill-complementary versus skill-replacing technologies based on education system constraints and labor supply costs. In the presence of markup differences, externalities, and other social effects, the direction of innovation can be systematically distorted. I build a simple model of endogenous technology to study distortions in the direction of innovation. Empirical findings across a number of different areas are consistent with this framework's predictions. I use data from several studies to estimate the framework's key parameters and combine them with rough estimates of differential externalities and markups to provide suggestive evidence that innovation distortions can be substantial in the context of industrial automation, health care, and energy, and that correcting them could have sizable welfare...	Daron Acemoğlu
9	2010	GOVERNMENT SPENDING COMPOSITION, TECHNICAL CHANGE, AND WAGE INEQUALITY ↗ In this paper we argue that government spending played a significant role in stimulating the wave of innovation that hit the U.S. economy in the late 1970s and in the 1980s, as well as the simultaneous increase in inequality and in education attainments. Since the late 1970s U.S. policymakers began targeting commercial innovations more directly and explicitly. We focus on the shift in the composition of public demand toward high-tech goods, which, by increasing the market-size of innovative firms, functions as a de facto innovation policy tool. We build a quality-ladders non-scale growth model with heterogeneous industries and endogenous supply of skills, and show that an increase in the...	Guido Cozzi, Giammario Impullitti
9	2023	Distorted Innovation: Does the Market Get the Direction of Technology Right? ↗ This paper directly addresses how market forces distort the direction of innovation away from socially optimal outcomes, a core theme of the project examining how innovation direction shapes skilled labor demand and training needs. The framework's application to industrial automation is particularly relevant for understanding how technology-driven shifts in labor demand may not align with education system capacity to supply appropriate skills. In the presence of markup differences, externalities and other social considerations, the equilibrium direction of innovation can be systematically distorted. This paper builds a simple model of endogenous technology, which generalizes existing comparative static results and characterizes potential distortions in the direction of innovation. I show that empirical findings across a number of different areas are consistent with this framework's predictions and I use data from several studies to estimate its key parameters. Combining these numbers with rough estimates of differential externalities and markups, I provide suggestive evidence that equilibrium distortions in the direction of...	Daron Acemoğlu
9	2002	A Theory of Defensive Skill-Based Innovation and Globalization This Paper considers a dynamic model of innovations in which firms can endogenously bias the direction of technological change. Both in a North-North and North-South context, we show that, when globalization triggers an increased threat of technological leapfrogging or imitation, firms tend to respond to that threat by biasing the direction of their innovations towards skilled labour-intensive technologies. We show that this process of defensive skill biased innovations generates an increase in wage inequalities in both regions. We then discuss suggestive empirical evidence of the existence of defensive skill biased technical change.	Mathias Thoenig, Thierry Verdier
9	2019	Machines Could Not Compete with Chinese Labor: Evidence from U.S. Firms’ Innovation This paper directly addresses directed technical change by examining how labor cost shocks affect the direction of innovation toward products versus processes, a core mechanism in understanding how input prices shape innovation incentives. The findings on labor-saving innovation substitution are highly relevant to understanding how talent supply constraints and labor costs influence R&D allocation and the pace of technology adoption across different innovation types. We study how the change in the price of labor affects the direction of technological change using a novel measure decomposing innovations into products (new goods) and processes (lower production costs). Using the 1999 U.S.-China agreement as a shock that lowered effective labor cost, we find that U.S. firms operating in China decrease their share of process innovations by 9% and that this adjustment is driven by lower process innovation. We obtain the same results using a staggered loosening of restrictions on foreign ownership across industries in China over 1995-2012. This suggests that cheap abundant labor substitutes for labor-saving innovation.	Jan Bena, Elena Simintzi
9	1991	Vintage Human Capital, Growth, and Diffusion of New Technology ↗ This paper directly addresses how vintage-specific human capital skills constrain technology diffusion and adaptation, showing that faster technological change requires reallocation of skilled workers across technology generations. It explicitly models the lag between technology arrival and peak usage as driven by human capital constraints, which is central to understanding how training costs and skill supply affect the pace of labor market adjustment to technological shifts. This paper develops a model of vintage human capital in which each technology requires vintage specific skills. We examine the properties of a stationary equilibrium for our economy. The stationary equilibrium is characterized by an endogenous distribution of skilled workers across vintages. The distribution is shown to be single peaked and, under general conditions, there is a lag between the time when a technology appears and the peak of it's usage, a phenomenon known as diffusion. An increase in the rate of exogenous technological change shifts the distribution of human capital to more recent vintages thereby increasing the diffusion rate.	V. V. Chari, Hugo A. Hopenhayn
9	2025	Artificial Intelligence and the Labor Market ↗ This paper directly examines how AI-driven technological change affects labor demand across occupations and tasks, measuring the speed and mechanisms of labor market adjustment to innovation. It addresses core project themes of technology-driven shifts in industry demand, skill-specific labor supply responses, and how labor market frictions mediate the relationship between innovation and employment outcomes. We use advances in natural language processing to construct new measures of workers' task-level exposure to artificial intelligence (AI) and machine learning from 2010 to 2023, capturing variation across firms, occupations, and time.Tasks with higher AI exposure subsequently experience reduced labor demand.To interpret these patterns, we develop a model that separates direct substitution from indirect reallocative effects of labor-saving technologies.Two variables summarize the impact of AI on within-firm labor demand: the mean exposure of an occupation's tasks, which depresses demand, and the concentration of exposure in a few tasks, which offsets losses by enabling workers to reallocate...	Menaka Hampole, Dimitris Papanikolaou, Lawrence Schmidt, et al.
9	2020	Learning Occupational Task-Shares Dynamics for the Future of Work ↗ This paper directly examines how AI and automation are reshaping occupational task demands across wage levels and predicts future skill requirements, which is central to understanding skilled labor supply constraints during rapid technological change. The focus on task-level dynamics and workforce retraining needs aligns precisely with the project's core concern about how quickly labor supply can adapt to technology-driven shifts in industry demand. The recent wave of AI and automation has been argued to differ from previous General Purpose Technologies (GPTs), in that it may lead to rapid change in occupations' underlying task requirements and persistent technological unemployment. In this paper, we apply a novel methodology of dynamic task shares to a large dataset of online job postings to explore how exactly occupational task demands have changed over the past decade of AI innovation, especially across high, mid and low wage occupations. Notably, big data and AI have risen significantly among high wage occupations since 2012 and 2016, respectively. We built an ARIMA model to predict future occupational task demands and showcase...	Subhro Das, Sebastian Steffen, Wyatt Clarke, et al.
9	2024	Learning From Ricardo and Thompson: Machinery and Labor in the Early Industrial Revolution and in the Age of Artificial Intelligence ↗ This paper directly addresses how technological change (automation and AI) affects skilled labor supply, wage dynamics, and labor market adjustment—core themes of the project. It examines the historical and contemporary relationship between innovation, labor productivity, and worker outcomes, providing critical perspective on whether labor can readily adapt to technology-driven shifts in demand. David Ricardo initially believed machinery would help workers but revised his opinion, likely based on the impact of automation in the textile industry. Despite cotton textiles becoming one of the largest sectors in the British economy, real wages for cotton weavers did not rise for decades. As E.P. Thompson emphasized, automation forced workers into unhealthy factories with close surveillance and little autonomy. Automation can increase wages, but only when accompanied by new tasks that raise the marginal productivity of labor and/or when there is sufficient additional hiring in complementary sectors. Wages are unlikely to rise when workers cannot push for their share of productivity...	Daron Acemoğlu, Simon Johnson
9	2020	Hard and Soft Skills in Vocational Training: Experimental Evidence from Colombia ↗ test We randomly assign applicants to over-subscribed programs to study the effects of teaching hard and soft skills in vocational training and examine their impacts on skills and labor market outcomes using both survey and administrative data. We find that providing vocational training that either emphasizes social or technical skills increases formal employment. We also find that admission to a vocational program that emphasizes technical relative to social skills increases overall employment and also days and hours worked in the short term. Yet, emphasis on softskills training helps applicants sustain employment and monthly wages over the longer term and allows them to catch up with those...	Felipe Barrera‐Osorio, Adriana D. Kugler, Mikko Silliman
9	2024	Tapping into Talent: Coupling Education and Innovation Policies for Economic Growth ↗ This paper directly addresses how education policy and training costs shape the supply of specialized talent for innovation, examining the time lag between education investments and innovation outcomes—core themes of the project. It combines endogenous growth theory with human capital formation and analyzes how education systems affect the pace of adaptation to innovation opportunities, making it highly relevant to understanding talent supply constraints on technological change. Abstract How do innovation and education policy affect individual career choices and aggregate productivity? This paper analyses the effect of R&D subsidies and higher education policy on productivity growth through the supply of innovative talent. We put scarce talent, higher education attainment, and career choice at the centre of a new endogenous growth framework with individual-level heterogeneity in talent, financial resources, and preferences. We link the model to micro-level data from Denmark on the backgrounds of who obtains a PhD and becomes an inventor and the outcomes of a set of policy interventions. We find that R&D subsidies can be strengthened when combined with higher...	Ufuk Akcigit, Jeremy Pearce, Marta Prato
9	2001	Technological Acceleration, Skill Transferability and the Rise in Residual Inequality This paper directly addresses how technological acceleration affects skill transferability and labor market adjustment, examining how workers' capacity to adapt skills to new equipment is constrained by the pace of technological change. It provides a mechanism linking innovation speed to skilled labor supply flexibility and wage inequality dynamics, core concerns of the project regarding how training costs and skill adjustment lags constrain labor supply response to technological shifts. This Paper provides an interpretation for the recent rise in residual wage inequality which is consistent with the empirical observation that a sizeable part of this increase has a transitory nature, a feature that eludes standard models based on ex-ante heterogeneity in ability. In the model an acceleration in the rate of quality-improvement of equipment, like the one observed from the early 70's, reduces workers’ capacity to transfer skills from old to new machines. This force generates a rise in the cross-sectional variance of skills, and therefore of wages. Through calibration, the Paper shows that this mechanism can account for 30% of the surge in residual inequality in the US economy...	Giovanni L. Violante
9	2022	Does the Cream Always Rise to the Top? The Misallocation of Talent in Innovation ↗ This paper directly addresses talent allocation in innovation and how education/training costs create barriers to entering high-skill occupations, showing that financial constraints and credentialing spending distort the supply of inventors. It combines endogenous growth modeling with human capital formation, examining how education system frictions affect innovation capacity and labor market outcomes in the innovation sector. The misallocation of talent in innovation – “missing Einsteins” – has a first-order impact on growth and welfare. Surname-level empirical analysis combining inventor and census micro-data reveals people from richer backgrounds are more likely to become inventors, but those from high-education backgrounds become more prolific inventors. Motivated by this discrepancy, an endogenous growth model with financial frictions on the household side is developed. Individuals compete for scarce inventor training. The rich can become inventors even if mediocre through excessive credentialing spending. Shutting down credentialing spending raises innovation, growth, welfare, and inequality. Optimal...	Murat Alp Celik
9	2021	Technology, Vintage-Specific Human Capital, and Labor Displacement: Evidence from Linking Patents with Occupations ↗ This paper directly addresses skilled labor supply adjustment to technological change by examining how workers' technology exposure affects earnings and employment, with particular attention to skill obsolescence and the time required for workers to adapt. The focus on vintage-specific human capital and the mismatch between incumbent worker skills and new technology requirements is central to understanding labor supply constraints during rapid technological change. We develop a measure of workers' technology exposure that relies only on textual descriptions of patent documents and the tasks performed by workers in an occupation. Our measure appears to identify a combination of labor-saving innovations but also technologies that may require skills that incumbent workers lack. Using a panel of administrative data, we examine how subsequent worker earnings relate to workers' technology exposure. We find that workers at both the bottom but also the top of the earnings distribution are displaced. Our interpretation is that low-paid workers are displaced as their tasks are automated while the highest-paid workers face lower earnings growth as some of their...	Leonid Kogan, Dimitris Papanikolaou, Lawrence Schmidt, et al.
9	2016	Skill-Biased Technical Change and the Cost of Higher Education ↗ This paper directly addresses how education costs shape human capital formation and skilled labor supply responses to technological change, examining the relationship between rising training costs and college enrollment decisions. It uses a general equilibrium framework to model skill-biased technical change alongside education costs, demonstrating how training expenses constrain talent supply—a core mechanism in the project's analysis of labor market adjustment to innovation-driven demand shifts. We document the growth in higher education costs and tuition over the past 50 years. To explain these trends, we develop a general equilibrium model with skill- and sector-biased technical change. Finding the model’s parameters through a combination of estimation and calibration, we show that it can explain the rise in college costs between 1961 and 2009, along with the increase in college attainment and the change in the relative earnings of college graduates. The model predicts that if college costs had ceased to grow after 1961, enrollment in 2010 would have been 3%–6% higher.	John Bailey Jones, Fang Yang
9	2011	LABOR-MARKET FRICTIONS, HUMAN CAPITAL ACCUMULATION, AND LONG-RUN GROWTH: POSITIVE ANALYSIS AND POLICY EVALUATION* ↗ This paper directly addresses how labor-market frictions interact with human capital accumulation to affect long-run growth, examining how education/training policies and labor-market matching efficiency influence the pace of skill development and economic adaptation. It is highly relevant to the project's core focus on how training costs and labor-market frictions constrain the supply of specialized labor in response to technological change. We construct a search model with endogenous human capital and labor participation to study the growth effects of short-run frictions and the effectiveness of human capital policies. Employment, learning effort, and output growth increase with more effective learning, better labor-market matching, lower job separation, or less costly vacancy creation. Although output growth, employment, vacancy creation, and learning and search effort are most responsive to changes in a human capital policy that directly affects learning effort, such a policy need not be more beneficial for welfare. The effects of human capital policies become larger as the severity of labor-market frictions rises.	Been-Lon Chen, Hung‐Ju Chen, Ping Wang
9	2006	How Do Patent Laws Influence Innovation This paper directly examines how institutional features (patent laws) shape the direction of innovation across industries, a core theme of the project's investigation into directed technical change. The finding that patent protection influences which sectors attract innovative effort is highly relevant to understanding how incentive structures affect innovation allocation and comparative advantage in specialized fields. Studies of innovation have focused on the effects of patent laws on the number of innovations but ignored effects on the direction of technological change. This paper introduces a new data set of close to fifteen thousand innovations at the Crystal Palace World's Fair in 1851 and at the Centennial Exhibition in 1876 to examine the effects of patent laws on the direction of innovation. The paper tests the following argument: if innovative activity is motivated by expected profits, and if the effectiveness of patent protection varies across industries, then innovation in countries without patent laws should focus on industries where alternative mechanisms to protect intellectual property are...	Petra Moser
9	1999	General Equilibrium Cost Benefit Analysis of Education and Tax Policies This paper directly addresses human capital formation through education and training within an endogenous growth framework, examining how education costs and policies affect skilled labor supply responses—core concerns of the project. It specifically analyzes skill-biased technical change and the lag between policy interventions and labor supply adjustment, demonstrating how education systems shape the pace of adaptation to technological demand shifts. This paper formulates and estimates an open-economy overlapping generation general-equilibrium model of endogenous heterogeneous human capital in the form of schooling and on-the-job training. Physical capital accumulation is also analyzed. We use the model to explain rising wage inequality in the past two decades due to skill-biased technical change and to estimate investment responses. We compare an open economy version with a closed economy version. Using our empirically grounded general equilibrium model that explains rising wage inequality, we evaluate two policies often suggested as solutions to the problem of rising wage inequality: (a) tuition subsidies to promote skill formation...	James J. Heckman, Lance Lochner, Christopher Taber
9	2017	Local Labor Markets and Human Capital Investments ↗ This paper directly investigates how local labor market shocks influence human capital investments, providing empirical evidence on the speed and geographic variation of skilled labor supply adjustments. It aligns perfectly with the project's focus on how labor market conditions and education systems affect the pace of adaptation to technology-driven demand shifts. ABSTRACT I study whether human capital investments are based on local rather than national demand, using two positive and two negative shocks with differential local effects: the dot-com crash, the fracking boom, the 2008 financial crisis, and the shock making Delaware a financial headquarters. I find impacts on the share of sector-relevant degrees awarded following these shocks, on average across the United States. However, universities in areas more exposed to sectoral shocks experience greater changes in sector-relevant majors. Differential impacts on major choice at the most exposed universities account for 15–45 percent of the overall national effect on sector-relevant degrees.	Russell Weinstein
9	2014	Effects of economic development in China on skill-biased technical change in the US ↗ This paper directly addresses the core theme of how labor supply changes drive the direction of innovation through skill-biased technical change, a key mechanism in directed technical change models. It provides theoretical and empirical evidence on how shifts in global labor endowments influence US technological adaptation, which is central to understanding the interplay between labor markets and innovation dynamics. In this study, we explore the effects of a change in unskilled labor in China on the direction of innovation in the US by incorporating production offshoring into a North-South model of directed technical change. We find that intellectual property rights (IPRs) and offshoring are different ways for the labor endowment of the South to affect the size of the market for innovations in the North. Absent offshoring and lacking IPRs in the South - as in China in the early 1980s - an increase in Southern unskilled labor should lead to skill-biased technical change. If instead offshoring is present and/or IPRs are better enforced (as in China in more recent times), then a decrease in unskilled...	Angus C. Chu, Guido Cozzi, Yuichi Furukawa
9	2006	Technology and the Labor Market ↗ This paper directly addresses how education and training systems respond to technology-driven changes in skill demand, with particular emphasis on the lag between investment flows and human capital stock accumulation as a source of labor supply constraints during technological cycles. It explicitly examines the tension between rising returns to human capital and the delayed supply response through enrollments, making it highly relevant to understanding how training time constraints affect labor market adjustment to innovation. Abstract Economic developments of the past 3 decades posed new questions to economists: What are the causes of fluctuations in rates of return to human capital? What is the relation between the changing skill-wage structure and changing overall wage inequality? Does the widening of the wage structure produce an equilibrating supply response? What are the causes, dimensions and implications of the “technological cycle” for wages, unemployment, and its “natural rate”? Why is the long term trend of human capital formation relentlessly upward? My research of the past decade, among that of other economists, attempted to provide answers to these questions, as described above. In the course of the...	Jacob Mincer
9	2015	Innovating in Science and Engineering or 'Cashing In' on Wall Street? Evidence on Elite STEM Talent This paper directly addresses how career incentives and labor market opportunities shape the acquisition of specialized human capital in STEM fields, examining whether talent supply constraints in innovation sectors result from competition with finance and how labor market shocks affect students' educational choices. It provides empirical evidence on the mechanisms linking innovation demand, skilled labor supply, and human capital formation during technological and labor market transitions. Using data on MIT bachelor's graduates from 1994 to 2012, this paper empirically examines the extent to which the inflow of elite talent into the financial industry affects the supply of innovators in science and engineering (S&E). I first show that finance does not systematically attract those who are best prepared at college graduation to innovate in S&E sectors. Among graduates who majored in S&E, cumulative GPA strongly and positively predicts long-term patenting; this result is robust to controlling for choices of major and career. In contrast, GPA negatively predicts the probability of taking a first job in finance after college. There is suggestive evidence that S&E and finance value...	Pian Shu
9	2004	New technologies, skills obsolescence, and skill complementarity ↗ This paper directly examines how new technologies affect skilled labor supply dynamics, specifically analyzing the interaction between worker experience, skill transferability, and technology adoption—core mechanisms in understanding labor supply constraints during technological change. The distinction between skill obsolescence and skill complementarity directly addresses how education and training systems affect the pace of technological adaptation across different worker groups. This paper considers how new technologies affect the returns to experience and how experience affects the adoption of new technologies. Whereas the traditional vintage model emphasizes skill obsolescence generated by imperfect transferability of skills across technologies, we consider the possibility that new technologies complement existing skills. Consistent with the vintage model, among college graduate men, young workers have adopted computers most intensively and the returns to experience have been flat. Among high school graduate men however, experienced workers have adopted new technologies most intensively and the returns to experience have increased, pointing toward...	Bruce A. Weinberg
9	2017	Human Capital Accumulation and Transition to Skilled Employment ↗ This paper directly addresses how education productivity and training costs affect skilled labor supply transitions and occupational mobility, core themes of the project. It explicitly models human capital formation's role in facilitating transitions to skilled employment and examines how education-specific technical change influences both skill supply elasticity and wage dynamics—precisely the labor market frictions and training constraints the project investigates. This paper assesses the impact of investment- and education-specific technical change on occupational transition and the skill premium in a model with human capital. In this framework, human capital augments labor productivity and also facilitates the transition to skilled employment. In line with empirical evidence, this setup predicts that an increase in the productivity of physical capital (investment-specific change) leads to very small increases in the relative supply of skilled workers and to significant and rising increases in the skill premium. Additionally, reforms that improve the productivity of resources used in education (education-specific change) reduce wage inequality and...	Konstantinos Angelopoulos, James R. Malley, Apostolis Philippopoulos
9	1997	The Supply of Skilled Labor and Skill-Based Technological Progress This paper directly addresses how skilled labor supply influences the direction of technological change, examining the endogenous adoption of skill-biased versus unskilled-biased technologies—a core theme of the project. The mechanism by which labor supply constraints affect innovation incentives and technological direction is precisely aligned with the project's focus on how education and training systems shape the pace and direction of adaptation to technological opportunities. Rising inequality in the relative wages of skilled and unskilled labor is often attributed to skill-biased technological progress. This paper presents a model in which the adoption of skill-biased or \\"unskilled-biased\\" technologies is endogenous. Conventional wisdom states that an increase in the supply of skilled labor lowers the relative wage of skilled to unskilled labor. In this paper, an increase in the supply of skilled labor leads to temporary stagnation in the wages of unskilled workers and an expanding gap between the wages of skilled and unskilled workers through an acceleration of skill-biased technological change.	Michael T. Kiley
9	2019	Occupation Mobility, Human Capital and the Aggregate Consequences of Task-Biased Innovations ↗ This paper directly addresses how workers adjust occupationally and accumulate human capital in response to task-biased technological innovations, with explicit modeling of skilled labor supply dynamics and occupational mobility constraints. It quantitatively evaluates how frictions to labor reallocation affect aggregate outcomes and inequality, making it highly relevant to understanding talent supply lags and education system constraints during technological change. We construct a dynamic general equilibrium model with occupation mobility, human capital accumulation and endogenous assignment of workers to tasks to quantitatively assess the aggregate impact of automation and other task-biased technological innovations. We extend recent quantitative general equilibrium Roy models to a setting with dynamic occupational choices and human capital accumulation. We provide a set of conditions for the problem of workers to be written in recursive form and provide a sharp characterization for the optimal mobility of individual workers and for the aggregate supply of skills across occupations. We craft our dynamic Roy model in a production setting where multiple...	Maximiliano Dvorkin, Alexander Monge‐Naranjo
9	2013	Experience vs. obsolescence: A vintage-human-capital model ↗ This paper directly addresses how human capital accumulation interacts with technological change and vintage dynamics, examining how workers' skill acquisition and wage trajectories respond to new technologies entering the market. It explores the temporal dimension of labor supply adjustment to innovation—a core concern of the project—by modeling how quickly workers can accumulate skills in new technological vintages and how skill demand evolves as technologies age. I introduce endogenous human-capital accumulation into an infinite-horizon version of Chari and Hopenhayn's (1991) [4] vintage-human-capital model. Returns to skill and tenure premia are highest in young vintages, where skill is scarcest and agents accumulate human capital fastest. As the vintage ages, the skill premium decreases and vanishes entirely upon vintage death. Workers run through cycles of human-capital accumulation: their wages rise as they accumulate skill, undergo downward pressure as the technology ages, and finally drop sharply when the worker switches to a new technology. The results are in line with German linked employer-employee data: tenure premia are highest in young...	Matthias Kredler
9	2020	Labor Shortage and Innovation ↗ This paper directly investigates the central project theme by providing empirical evidence that skilled labor shortages impede innovation and lead to the cancellation of projects. It explicitly links the supply constraints of specialized labor to innovation outcomes, addressing the lag between technology-driven demand and labor market adaptation. Skilled labor is a key input to the innovation process. A shortage in supply of skilled labor may hence impede innovation activities, resulting in lower productivity gains. While governments are concerned about these likely negative impacts, there is only limited empirical evidence whether and to what extent labor shortage affects innovation activities. The paper addresses this question using panel data from three waves (2017 to 2019) of the German innovation survey. We measure labor shortage by job openings that could not be filled at all, not with the required skills or only with significant delay, distinguishing different skill levels. We analyze whether labor shortage resulted in...	Jens Horbach, Christian Rammer
9	2018	The Supply of Skill and Endogenous Technical Change: Evidence from a College Expansion Reform ↗ This paper directly addresses the core theme of how the supply of skilled labor influences endogenous technical change and technology adoption. It provides empirical evidence linking labor market frictions in human capital formation to the direction of innovation and R&D allocation. We examine the labor market consequences of an exogenous increase in the supply of skilled labor in several municipalities in Norway, resulting from the construction of new colleges in the 1970s. We find that skilled wages increased as a response, suggesting that along with an increase in the supply there was also an increase in demand for skill. We also show that college openings led to an increase in the productivity of skilled labor and investments in R&D. Our findings are consistent with models of endogenous technical change where an abundance of skilled workers may encourage firms to adopt skill-complementary technologies.	Pedro Manuel Carneiro, Kai Liu, Kjell G. Salvanes
9	2013	Pathways to Adjustment: The Case of Information Technology Workers ↗ This paper directly addresses how skilled labor supply responds to technology-driven demand shocks in IT, examining the critical role of training pipelines and international talent flows in constraining domestic wage adjustments. It provides empirical evidence on the lag between labor demand shifts and supply responses, a core concern of the project regarding how education systems and training costs affect the pace of technological adaptation. One long-standing hypothesis about science and engineering labor markets is that the supply of highly skilled workers is likely to be inelastic in the short run. We consider the market for computer scientists and electrical engineers (IT workers) and the evolution of wages and employment through two periods of increased demand. Relative to the boom of the 1970s, the demand shock in the 1990s generated relatively greater changes in employment and smaller changes in wages. The growth in the pool of skilled workers abroad, combined with increased immigration in high-skill fields, is central to this story.	John Bound, Breno Braga, Joseph M. Golden, et al.
9	2012	Skill Structure and Technology Structure: Innovation and Growth Implications This paper directly addresses directed technical change and how skill structure (high- vs. low-skilled labor ratios) affects the direction of innovation and economic growth through technology structure. It explicitly models the mechanism by which skilled labor supply influences R&D allocation and innovation patterns, which is central to the project's investigation of how talent availability constrains technological development and growth. This paper builds an endogenous growth model of directed technical change with vertical and horizontal R&D and scale effects at the industry level to study an analytical mechanism that is consistent with the observed crosscountry pattern in the skill structure, the technology structure and economic growth. We calibrate the model in order to uncover the effect of the skill structure on economic growth by studying how the former affects the technology structure. We find that the small positive elasticity of the economic growth rate regarding the ratio of high- to low-skilled workers that is empirically observed is explained by the combination of moderate levels of the market complexity costs...	Pedro Mazeda Gil, Óscar Afonso, Paulo Brito
9	2020	Higher Education and Corporate Innovation ↗ This paper directly addresses the impact of skilled labor supply on innovation outcomes, aligning with the project's focus on how human capital formation drives technological change. It provides empirical evidence on the causal link between the availability of college-educated workers and corporate innovation, which is central to understanding talent supply constraints and directed technical change. This paper investigates the impact of higher education on corporate innovation. To establish causality, we exploit a policy-induced exogenous shock in the supply of Chinese college-educated labor starting in 2003. Using a difference-in-differences approach, we find that Chinese firms in skilled industries generate better innovation outcomes as measured by patents and citations than those in unskilled industries. This effect is more pronounced among firms headquartered in a province with more science and engineering college graduates, young firms that are more likely to hire young graduates, and firms located near universities. Moreover, higher education expansion increases a firm’s...	Dongmin Kong, Bohui Zhang, Jian Zhang
9	2003	Implications of the Capital-Embodiment Revolution for Directed R&D and Wage Inequality This paper directly examines how technical change (specifically capital-embodied technical change) shapes the direction of R&D and affects skilled labor demand, which are core themes of the project. It specifically addresses how innovation incentives and factor-specific technical change respond to technological shifts, demonstrating the endogenous relationship between innovation direction and skill premium dynamics that the project investigates. The skill premium — the wage of skilled labor relative to the wage of unskilled labor — has increased substantially in the United States since the 1970s. The higher skill premium has been attributed to skill-biased factor-specific technical change or to capital accumulation when skilled labor is relatively more complementary to capital than is unskilled labor. The authors describe an economic mechanism through which factor-specific technical change and capital accumulation respond to changes in the rate of capital-embodied technical change, and they trace out how accelerated capital-embodied technical change increases the skill premium in the medium and long run.	Andreas Hornstein, Per Krusell
9	2021	An Elementary Theory of Directed Technical Change and Wage Inequality ↗ This paper directly addresses directed technical change and its interaction with skilled labor supply, examining how relative skill supply endogenously shapes the direction of innovation toward automation or skill-biased technologies. It extends foundational directed technical change theory to multiple skill levels and labor-replacing technologies, core concerns of the project regarding how talent supply constraints influence innovation direction during technological transitions. Abstract This article generalizes central results from the theory of (endogenously) directed technical change to settings where technology does not take a labour-augmenting form and with arbitrarily many levels of skill. Building on simple notions of complementarity, the results remain intuitive despite their generality. The developed theory allows to study the endogenous determination of labour-replacing, that is, automation technology through the lens of directed technical change theory. In an assignment model with a continuum of differentially skilled workers and capital, where capital perfectly substitutes for labour in the production of tasks, any increase in the relative supply of...	Jonas Loebbing
9	2024	Skills or Degree? The Rise of Skill-Based Hiring for Ai and Green Jobs ↗ This paper directly addresses the project's core theme of talent supply constraints by analyzing how labor markets adapt to rapid technological shifts in AI and green sectors through the lens of skill-based hiring. It provides empirical evidence on the lag between education systems and industry demand, highlighting how flexible hiring practices attempt to mitigate the time-intensive nature of traditional human capital formation. For emerging professions, such as jobs in the field of Artificial Intelligence (AI) or sustainability (green), labour supply does not meet industry demand. In this scenario of labour shortages, our work aims to understand whether employers have started focusing on individual skills rather than on formal qualifications in their recruiting. By analysing a large time series dataset of around one million online job vacancies between 2020 and 2023 from the UK and drawing on diverse literature on technological change and labour market signalling, we provide evidence that employers have started so-called “skill-based hiring” for AI and green roles, as more flexible hiring practices allow them to...	Eugenia González Ehlinger, Fabian Stephany
9	2020	Technological Transitions with Skill Heterogeneity Across Generations ↗ This paper directly addresses how skilled labor supply adjusts to technological change through both within-generation reallocation and cross-generation skill investment, with explicit focus on how training costs and skill specificity constrain the speed of labor market adaptation. It provides theoretical and empirical evidence on technology-skill specificity as a key friction determining the pace of technological transitions, which is central to understanding how education and training systems affect labor supply responsiveness to innovation-driven demand shifts. We study how inequality, skills, and economic activity adjust over time to technological innovations. We develop a theory of technological transitions where economies adjust through two margins: (i) within-generation reallocation of workers with heterogeneous skills, and (ii) cross-generation changes in the skill distribution driven by entering generations investing in skills. We then characterize the equilibrium dynamics, showing that they resemble those of a qtheory of skill investment where q is lifetime inequality. Technological transitions are slower and more unequal whenever innovations are biased towards economic activities intensive in skills which differ more from those used in the...	Rodrigo Adão, Martin Beraja, Nitya Pandalai-Nayar
9	2020	Occupational mobility and the returns to training ↗ This paper directly addresses the project's focus on transition costs and the destruction of specialized human capital when workers switch occupations. It provides crucial empirical evidence on how such mobility frictions impact wage returns and human capital accumulation, which are central to understanding labor supply flexibility during technological shifts. Abstract The literature on the returns to training has pointed out that, immediately following a training episode, wages of participants in employer‐sponsored training increase substantially while wages of participants in government‐sponsored training hardly change. We argue that there is a potential selection issue—most of the government‐sponsored trainees are occupation switchers while most participants in employer‐sponsored training are occupation stayers. An occupational switch involves a substantial destruction of human capital, and once we account for the associated decline in wages, we find a large positive impact of both employer‐ and government‐sponsored training on workers’ human...	Gueorgui Kambourov, Iourii Manovskii, Miana Plesca
9	2006	Endogenous Skill Bias in Technology Adoption: City-Level Evidence from the IT Revolution ↗ This paper directly addresses directed technical change and the bidirectional relationship between skilled labor supply conditions and technology adoption decisions, examining how initial labor endowments shape innovation direction. It empirically demonstrates how education/training costs (reflected in relative wages) influence which technologies firms adopt, which is central to understanding talent supply constraints on technological adaptation. This paper focuses on the bi-directional interaction between technology adoption and labor market conditions. We examine cross-city differences in PC adoption, relative wages, and changes in relative wages over the period 1980-2000 to evaluate whether the patterns conform to the predictions of a neoclassical model of endogenous technology adoption. Our approach melds the literature on the effect of the relative supply of skilled labor on technology adoption to the often distinct literature on how technological change influences the relative demand for skilled labor. Our results support the idea that differences in technology use across cities and its effects on wages reflect an equilibrium...	Paul Beaudry, Mark Doms, Federal Reserve Bank of San Francisco, et al.
9	2023	COLLEGE EXPANSION, TRADE, AND INNOVATION: EVIDENCE FROM CHINA ↗ This paper directly examines how education expansion affects firms' innovation and R&D allocation decisions, addressing the core relationship between skilled labor supply growth and the direction of innovation. It provides empirical evidence that increased education availability constrains innovation patterns and export strategies, which is central to understanding how talent supply shapes technology adoption and firm-level innovation incentives. Abstract China has expanded the yearly quota on newly admitted college students by more than seven times since 1999. How did this massive education expansion affect firms' export and innovation choices? I document that after this expansion impacted the labor market, manufacturing firms' innovation increased considerably, especially among exporting firms, accompanied by sizable skill upgrading of exports. I then develop a multi‐industry spatial equilibrium model, featuring skill intensity differences across industries and heterogeneous firms' innovation and export choices. Quantitatively, the college expansion explained 72% of increases in China's manufacturing research and development (R&D)...	Xiao Ma
9	2024	Exposure to Artificial Intelligence and Occupational Mobility: A Cross-Country Analysis ↗ This paper directly addresses how AI-driven technological change affects skilled labor supply and occupational mobility, examining how workers adjust to AI exposure through job transitions. It provides empirical evidence on labor market adaptation dynamics and heterogeneous effects across education levels, which is central to understanding talent supply constraints and the pace of adjustment to technology-driven shifts in industry demand. We document historical patterns of workers' transitions across occupations and over the life-cycle for different levels of exposure and complementarity to Artificial Intelligence (AI) in Brazil and the UK. In both countries, college-educated workers frequently move from high-exposure, low-complementarity occupations (those more likely to be negatively affected by AI) to high-exposure, high-complementarity ones (those more likely to be positively affected by AI). This transition is especially common for young college-educated workers and is associated with an increase in average salaries. Young highly educated workers thus represent the demographic group for which AI-driven structural change...	Mauro Cazzaniga
9	2023	2022 KLEIN LECTURE PARENTAL EDUCATION AND INVENTION: THE FINNISH ENIGMA ↗ This paper directly examines how parental education shapes the supply of inventors and innovative talent, revealing that education systems fundamentally affect who enters innovation-related fields. The analysis of a comprehensive schooling reform's impact on intergenerational transmission of inventive capacity is highly relevant to understanding how education policy influences skilled labor supply for innovation. Abstract Why is invention strongly positively correlated with parental income not only in the United States but also in Finland, which displays low income inequality and high social mobility? Using data on 1.45 M Finnish individuals and their parents, we find the following: (i) the positive association between parental income and off‐spring probability of inventing is greatly reduced when controlling for parental education; (ii) instrumenting for the parents having an MSc degree using distance to nearest university reveals a large causal effect of parental education on offspring probability of inventing; and (iii) the causal effect of parental education has been markedly weakened by the...	Philippe Aghion, Ufuk Akcigit, Ari Hyytinen, et al.
9	2012	The effects of technological change on schooling and training human capital ↗ This paper directly addresses how technological change affects the formation and returns to different types of human capital (schooling versus training), examining skilled labor supply responses to technology-driven shifts in demand. It provides empirical evidence on the speed and nature of labor market adjustment to technological change, showing differential impacts by ability and training type, which is central to understanding talent supply constraints and education system responses. This study investigates the differential effects of technological change on general human capital acquired through schooling and technology-specific human capital acquired through training based on a life-cycle human capital investment model. Using data from the National Longitudinal Survey of Youth 79 (1987–2003), I find that for both high-ability and low-ability individuals, the net effect of technological change on training human capital is obsolescence, whereas that on schooling human capital is an increase in productivity in spite of the obsolescence. This finding is consistent with the view that individuals with more schooling may enjoy an advantage under rapid technological change...	Xueda Song
9	2003	Skill-specific rather then General Education: A Reason for US-Europe Growth Differences? ↗ This paper directly addresses how education systems (general vs. vocational) shape the pace of technology adoption and economic growth, examining how training costs and education structure affect labor supply adaptation to technological change. It explicitly models the link between education policy, skilled labor formation, and endogenous growth during periods of technological advance—core themes of the research project. In this paper, we develop a model of technology adoption and economic growth in which households optimally obtain either a concept-based, "general" education or a skill-specific, "vocational" education. General education is more costly to obtain, but enables workers to operate new technologies incorporated into production. Firms weigh the cost of adopting and operating new technologies against increased revenues and optimally choose the level of adoption. We show that an economy whose policies favor vocational education will grow slower in equilibrium than one that favors general education. Moreover, the gap between their growth rates will increase with the growth rate of available...	Dirk Krueger, Krishna Kumar
9	2012	Skill-Biased Technology Imports, Increased Schooling Access, and Income Inequality in Developing Countries ↗ This paper directly addresses directed technical change and how it interacts with skilled labor supply adjustments through education expansion, showing that increased schooling access can paradoxically accelerate skill-biased innovation and worsen inequality. It examines the mismatch between labor supply responses (via schooling) and the direction of technological change, a core concern of the project regarding how education systems shape adaptation to technology-driven demand shifts. Why has schooling not countered the pervasive rises in wage inequality driven by skill-biased technical change? Using data and a model of directed technical change in which developing countries acquire technology licenses from abroad, we show technological change is skill-biased in the South simply because it is in the North. This causes permanently rising wage inequality in the South. We model expanded schooling access as producing relatively educated new cohorts of labor market entrants. This makes the market for skill-biased technologies more attractive, which generates accelerated skill-biased technical change, which leads to higher wage inequality and possibly stagnant unskilled wages.	Alberto Behar
9	1997	The Supply of Skilled Labor and Skill-Biased Technological Progress ↗ This paper directly addresses the central project theme by modeling the endogenous response of technology adoption to changes in skilled labor supply, highlighting how training lags and supply constraints drive skill-biased innovation. It provides a critical theoretical framework for understanding how the pace of adaptation in education and training systems influences the direction of technological change and labor market outcomes. Rising inequality in the relative wages of skilled and unskilled labor is often attributed to skill-biased technological progress. This paper presents a model in which the adoption of skill-biased or "unskilled-biased" technologies is endogenous. Conventional wisdom states that an increase in the supply of skilled labor lowers the relative wage of skilled to unskilled labor. In this paper, an increase in the supply of skilled labor leads to temporary stagnation in the wages of unskilled workers and an expanding gap between the wages of skilled and unskilled workers through an acceleration of skill-biased technological change.	Michael T. Kiley
9	2018	Specific Human Capital and Wait Unemployment ↗ This paper directly addresses the project's core theme of how occupation-specific human capital creates switching costs that constrain labor supply flexibility during technological shifts. It provides empirical evidence for the 'training takes time' friction and the resulting delays in labor market adjustment, which are central to understanding how talent supply lags may constrain growth. A displaced worker might rationally prefer to wait through a long spell of unemployment instead of seeking employment at a lower wage in a job he is not trained for. I evaluate this trade-off using micro data on displaced workers. To achieve identification, I exploit the fact that the more a worker has invested in occupation-specific human capital, the more costly it is for him to switch occupations and therefore the higher is his incentive to wait. I find that between 9% and 17% of total unemployment in the United States can be attributed to wait unemployment.	Benedikt Herz
9	2003	US-Europe Differences in Technology Adoption and Growth The Role of Education and Other Policies ∗ This paper directly addresses how education policy (general vs. vocational training) shapes the speed of technology adoption and skilled labor supply adjustment, examining how training system design affects growth during rapid technological change. It explicitly models the tension between specialized skill-specific education and general education needed for new technologies, making it highly relevant to understanding talent supply constraints and innovation direction. European economic growth has been weak, compared to the US, since the 80s. In previous work (Krueger and Kumar (2003)), we argued that the European focus on specialized, vocational education might have been effective during the 60s and 70s, but resulted in a growth gap relative to the US during the subsequent information age, when new technologies emerged more rapidly. In this paper, we extend this framework to assess the importance of education policy, when compared to labor market rigidity and product market regulation, which have also been suggested as reasons for US-Europe differences. Households decide between acquiring general education, which allows them to work in high-tech firms...	Dirk Krueger, Krishna B. Kumar
9	2024	Learning from Ricardo and Thompson: Machinery and Labor in the Early Industrial Revolution, and in the Age of AI ↗ This paper directly addresses how technological change (automation/AI) affects skilled labor supply and wages, examining the crucial lag between productivity growth and labor market adjustment—a core concern of the project. It emphasizes that automation's impact depends on complementary factors like new task creation and worker bargaining power, which relates directly to how education systems and labor market institutions shape adaptation to technological shifts. David Ricardo initially believed machinery would help workers but revised his opinion, likely based on the impact of automation in the textile industry. Despite cotton textiles becoming one of the largest sectors in the British economy, real wages for cotton weavers did not rise for decades. As E.P. Thompson emphasized, automation forced workers into unhealthy factories with close surveillance and little autonomy. Automation can increase wages, but only when accompanied by new tasks that raise the marginal productivity of labor and/or when there is sufficient additional hiring in complementary sectors. Wages are unlikely to rise when workers cannot push for their share of productivity...	Daron Acemoğlu, Simon Johnson
9	2002	Skill-specific rather than General Education: A Reason for Slow European Growth? ↗ This paper directly addresses the project's core theme by modeling how the type of education system (general vs. skill-specific) impacts the speed of labor supply adaptation to technological change. It provides a theoretical framework for understanding how training costs and educational structures create frictions that constrain growth during periods of rapid innovation. In this paper, we develop a model of technology adoption and economic growth in which households optimally obtain either a concept-based, "general" education or a skill-specific, "vocational" education. General education is more costly to obtain, but reduces the loss of a worker's task-specific productivity whenever a new technology is incorporated into production. Firms weigh the cost of adopting and operating new technologies against increased revenues and optimally choose the level of adoption. Conditional on their education, households then choose between working in the technology-adopting sector and the non-adopting sector. We show that an economy whose policies favor vocational...	Dirk Krueger, Krishna B. Kumar
9	2022	Finance and the Reallocation of Scientific, Engineering and Mathematical Talent ↗ This paper directly addresses the project's core theme of how talent supply and allocation constraints affect economic growth, specifically highlighting the opportunity costs of skilled labor diversion. It provides empirical evidence on the lag and friction in aligning specialized human capital with productive sectors, which is crucial for understanding technology-driven labor market adjustments. The US financial sector has become a magnet for the brightest graduates in the science, technology, engineering and mathematical fields (STEM). We provide quantitative bases for this well-known fact and illustrate its consequences for the productivity growth in other sectors over the period 1980-2014. First, we find that the share of STEM talents grew significantly faster in finance than in other key STEM sectors such as high-tech, and this divergent pattern has been more evident for STEM than for general skills and more pronounced for investment banking. Second, this trend did not reverse after the Great Recession, and a persistent wage premium is found for STEM graduates working in...	Giovanni Marin, Francesco Vona
9	2024	2023 KLEIN LECTURE—CAPITAL AND WAGES ↗ This paper directly addresses directed technical change and how factor accumulation (capital) influences the direction of innovation toward automation versus labor-augmenting technologies, a core mechanism in the project's framework. It explicitly models how technology responds endogenously to economic conditions and shows conditions under which capital accumulation triggers automation rather than wage growth, directly relevant to understanding constraints on skilled labor demand and innovation direction. Abstract Does capital accumulation increase labor demand and wages? Neoclassical production functions, where capital and labor are q‐complements, ensure that the answer is yes, so long as labor markets are competitive. This result critically depends on the assumption that capital accumulation does not change the technologies being developed and used. I adapt the theory of endogenous technological change to investigate this question when technology also responds to capital accumulation. I show that there are strong parallels between the relationship between capital and wages and existing results on the conditions under which equilibrium factor demands are upward‐sloping (e.g., Acemoglu...	Daron Acemoğlu
9	2024	Capital and Wages ↗ Does capital accumulation increase labor demand and wages?Neoclassical production functions, where capital and labor are q-complements, ensure that the answer is yes, so long as labor markets are competitive.This result critically depends on the assumption that capital accumulation does not change the technologies being developed and used.I adapt the theory of endogenous technological change to investigate this question when technology also responds to capital accumulation.I show that there are strong parallels between the relationship between capital and wages and existing results on the conditions under which equilibrium factor demands are upward-sloping (e.g., Acemoglu, 2007).Extending...	Daron Acemoğlu
9	2013	The Endogenous Skill Bias of Technical Change and Inequality in Developing Countries ↗ This paper directly addresses how skill supply affects the direction of technical change and innovation bias, examining the relationship between education/training availability and technology adoption patterns. It explicitly models how increased skill supply shapes whether technical change favors skilled versus unskilled workers, which is central to understanding how talent supply constraints influence the direction of innovation and labor market adjustment dynamics. This paper draws on existing empirical literature and an original theoretical model to argue that globalization and skill supply affect the extent to which technology adoption in developing countries favors skilled workers. Developing countries are experiencing technical change that is skill-biased because skill-biased technologies are becoming relatively cheaper. Increased skill supply further biases technical change in favor of skilled labor. Free trade induces technology that favors skilled workers in skill-abundant developing countries and that favors unskilled workers in skill-scarce developing countries, and therefore amplifies the predicted wage effects of trade liberalization. These...	Alberto Behar, ABehar@imf.org
9	2007	Training and age-biased technical change This paper directly examines how training costs and labor supply adjustments respond to technological change, specifically investigating how older workers in low-skill occupations face barriers to retraining in computer skills during IT implementation. It provides empirical evidence on the critical mismatch between technology-driven skill demand and the pace of human capital formation, a core concern of the project. Using a matched employer-employee dataset on the French manufacturing sector in the 1990s, we investigate how training incidence responds to technical and organizational changes. Using a difference-in-difference approach across age groups and types of firms, we find that older workers in low-skill occupations lag behind in terms of training (in computer skills and in teamwork) when firms implement advanced information technologies. By contrast, there is no significant difference between age groups in the training response to advanced IT among workers in high-skill occupations, or in the training response to new organizational practices (among all skill groups). These results suggest that a...	Luc Behaghel, Nathalie Greenan
9	2017	Employee Career Constraint and Innovation ↗ [Title only] This title directly addresses the project's core concern with how labor market frictions and individual constraints affect the direction of innovation and talent allocation. It strongly suggests an investigation into the transition costs and barriers skilled workers face, which is central to understanding how talent supply lags constrain growth during technological shifts. No abstract available.	Novrys Suhardianto, Bright Gershion Godigbe
9	2024	The New Wave? The Role of Human Capital and STEM Skills in Technology Adoption in the UK ↗ This paper directly addresses the project's core theme of how skilled labor supply, specifically STEM human capital, shapes technology adoption during different technology waves like AI and cloud computing. It provides empirical evidence on the distinct role of specialized skills versus general human capital in driving the uptake of new technologies, which is central to understanding labor market adjustments to technological change. How important is the supply of skills for the adoption of advanced technologies? We study skill-biased information and communication technology adoption across two waves in the UK. We compare the ‘new wave’ during the 2010s - which includes ‘general pur-pose’ digital technologies such as cloud and artificial intelligence - with the previous wave of personal computers in the 1990s and early 2000s. We contrast the roles of general, college-level skills versus technology-related STEM skills in area and firm-level adoption patterns. Our findings indicate a continued role for general human capital in both waves, as well as a heightened role for STEM skills in driving the adoption of ‘new wave’...	Mirko Draca, Max Nathan, Viet Nguyen-Tien, et al.
9	2025	Routine-Biased Technological Change and Endogenous Skill Investments ↗ This paper directly examines how individuals endogenously adjust educational investments in response to technological change, modeling skill acquisition decisions as workers respond to shifts in skill demand and earnings—a core mechanism in the project's framework. It also quantifies how education systems and training costs affect labor market adaptation to automation, showing that without sufficient subsidies, endogenous responses cannot fully offset technology-driven disruptions. We investigate how individuals alter their educational investments in response to routine-biased technology. We find that individuals growing up in robot-impacted areas are more likely to complete a bachelor’s degree and experience a relative increase in earnings. Changes in the skill premium and opportunity cost appear to drive these effects. To interpret these findings, we estimate a model of endogenous skill acquisition where changes in the demand and supply of skills shape the path of earnings. Counterfactual simulations suggest that the endogenous skill response cannot fully undo the adverse earnings effects of automation unless there are sufficiently generous educational subsidies...	Danyelle Branco, Bladimir Carrillo, Wilman J. Iglesias
9	2023	Innovation Booms, Easy Financing, and Human Capital Accumulation ↗ This paper directly addresses how innovation booms affect skilled labor supply and human capital accumulation through wage incentives and subsequent skill obsolescence, examining the temporal mismatch between innovation demand and labor market adjustment. It provides empirical evidence on how financing constraints during technological shifts shape talent allocation and the long-term productivity consequences of labor reallocation, core themes of the project. Innovation booms are often fueled by easy financing that allows new technology firms to pay high wages that attracts skilled labor. Using the late 1990s Information and Communication Technology (ICT) boom as a laboratory, we show that skilled labor joining this new sector experienced sizeable long-term earnings losses. We show these earnings patterns are explained by faster skill obsolescence rather than either worker selection or the overall bust in the ICT sector. During the boom, financing flowed more to firms whose workers would experience the largest productivity declines, amplifying the negative effect of labor reallocation on aggregate human capital accumulation.	Johan Hombert, Adrien Matray
9	2016	Education and training in a model of endogenous growth with creative wear-and-tear ↗ This paper directly addresses the project's core inquiry by modeling the trade-off between general education and firm-specific training in the context of endogenous growth and technological change. It explicitly analyzes how the pace of technology adoption influences the supply of specialized labor and the optimal allocation of human capital investment, mirroring the study of training lags and innovation direction. How does the rate at which firms adopt new technologies affect the level of education and training of a country’s workforce? What is then the mix of general education and technology-specific training that maximises the growth rate of an economy? We try to answer these questions by developing an endogenous growth model which focuses on privately financed general education and firm financed technology specific training in a setting where creative destruction renders technologies gradually obsolete. We reproduce some stylized facts regarding the technology-education-training relationship and we show how the optimum amount of time devoted to education and training is affected by the rate of...	Adriaan van Zon, Roberto Antonietti
9	2010	Skilled Labor, Economic Transition and Income Dierences: A Dynamic Approach * This paper directly addresses how skilled labor supply constraints shape economic transition paths and income dynamics, examining the relationship between skill formation investment and technological change—core themes of the project. The model's focus on how training/skill formation affects the pace of modern growth and technology adoption aligns precisely with the project's investigation of talent supply lags constraining growth during rapid technological change. We propose a dynamic model of economic transition in which the supply constraint of skilled labor and skill premium are the focus. We argue that the constraint of skilled labor affect both the beginning date and the subsequent path of modern growth. The model matches the observed multiple paths of income inequality, such as U-shaped, inverted U-shaped or N-shaped paths. Hence, the model requires faster technology change and more investment on skill formation to account for the current income differences relative to models that focus only on steady states.	Wei Zou, Yong Liu
9	2009	Both Sides of the Story: Skill-biased Technological Change, Labour Market Frictions, and Endogenous Two-Sided Heterogeneity This paper directly addresses skill-biased technological change, labor market frictions, and endogenous skill-acquisition decisions by workers and firms in response to innovation—core themes of the project. It explicitly examines how education/training investments interact with technology adoption and labor market outcomes, making it highly relevant to understanding talent supply constraints during technological transitions. This paper presents a stylised framework to examine how skill-biased technological \nchange and labour market frictions affect the relationship between economic \nexpansion and unskilled unemployment. The first part of the analysis focuses on the \ninvestment decisions in skill-acquisition and technology adoption activities faced by \nworkers and firms in response to the introduction of an innovative technology. The \nsecond part examines how endogenous two-sided heterogeneity in the labour market \naffects the macroeconomic outcomes in terms of unemployment, technological diffusion, and economic expansion. To conclude, the framework is used to discuss the effects of alternative forms of...	Fabio Aricò
9	2005	Factor Supplies and the Direction of Technical Change ↗ This paper directly addresses the project's core theme of directed technical change by empirically linking human capital supply to the direction of skill-biased innovation. It provides critical evidence on how the availability of skilled labor influences R&D allocation and the specific nature of technological progress, which is central to understanding labor market adjustments during technological shifts. In this paper, we empirically address the hypothesis that there is a relationship between the supply of human capital and the rate and direction of skill-biased technical change (SBTC). Using country- and industry-level data on OECD countries, we find R&D; to be positively related to the supply of human capital. There is, however, no indication that this translates into higher rates of SBTC, when SBTC is measured as changes in the wage bill share of skilled labor. Interestingly, both R&D; and the rate of SBTC seem to be relatively high in low-skill industries in countries where the supply of human capital is relatively high.	Helena Svaleryd, Jonas Vlachos
9	2015	Endogenous Skill Biased Technical Change: Testing For Demand Pull Effect This paper directly tests the relationship between skilled labor supply changes and endogenous skill-biased technical change, examining how supply-side factors drive innovation direction—a core theme of the project. It uses German reunification as a natural experiment to isolate the demand-pull effect on technical change, providing empirical evidence on whether labor supply shifts generate directed innovation toward skilled tasks, which is central to understanding talent supply constraints on growth during technological transitions. ENDOGENOUS SKILL BIASED TECHNICAL CHANGE: TESTING FOR DEMAND PULL EFFECT* Abstract In this article we use the unification of Germany in 1990 to test the hypothesis that an increase in the supply of a production factor generates skill biased technical change. We test for this mechanism in the context of the model presented by Acemoglu and Autor (2011) that allows endogenous assignment of skills to tasks in the economy. We use cohorts of workers from comparable countries as a control group. After discussing the possible confounding factors, we conclude that this effect is absent. The differential pattern among the countries seems to be determined by labor market flexibilization and tax...	Francesco Bogliacino, Matteo Lucchesex
9	2019	The Future Of Jobs Is Facing One, Maybe Two, Of The Biggest Price Distortions Ever This paper directly addresses how policy-induced price distortions in labor markets (mobility barriers) shape the direction of technological change, causing innovation to be biased toward automating abundant low-skill labor rather than complementing scarce high-skill talent. This core mechanism is central to the project's examination of how labor supply constraints and market conditions influence innovation direction and skilled labor demand. Discussions of the future of jobs are concerned that technological change will displace labor and particularly jobs. In this work it is rarely remarked on the strangeness that some of the most globally scarce factors of high level technical expertise, capability to innovate, and entrepreneurial talent are devoted to economizing on--reducing the demand for--one of the most globally abundant factors: low to medium skill labor. I show that policy based barriers to the mobility of labor have created the largest single price distortion in history and that this price distortion induces biased technological change.Length: 36	Lant Prittchet
9	2026	Training Specificity and Occupational Mobility: Evidence From German Apprenticeships ↗ This paper directly addresses how training specificity affects labor market flexibility and occupational mobility, examining whether specialized education creates constraints on labor supply adaptation—a core concern of the project. The finding that training-occupation mismatch carries substantial wage penalties and that retraining is needed to maintain labor market fluidity speaks directly to how education system design shapes the pace and cost of labor market adjustment to changing skill demands. Apprenticeships play a key role in enabling successful school‐to‐work transitions in many countries, but in the presence of imperfect information, the specificity of this type of training may entail important costs for those working outside their training fields. I study this issue in one of the most prominent training settings, the German apprenticeship system. Using administrative data and a broad occupational classification, I find that 40% of individuals work in occupations different from their training. I estimate the cost of mismatch using vacancy instruments and extend methodological approaches in high‐dimensional selection settings. Lacking training in one's occupation entails an...	Dita Eckardt
9	2019	Changing demand for general skills, technological uncertainty, and economic growth ↗ This paper directly addresses how skill-type choices (general vs. specific) respond to technological innovation and uncertainty, and examines education subsidies' role in matching labor supply to firms' evolving skill demands as economies advance technologically. It combines endogenous innovation with human capital formation decisions, making it highly relevant to understanding how education systems shape skilled labor supply adjustment to technology-driven demand shifts. Abstract We develop a simple growth model featuring individuals’ choices between general and specific skills, endogenous technological innovation, and a government subsidy for education. The two types of skills differ by their productivity and transferability: general skills are transferable across firms, while each firm-specific skill has a productivity advantage in the firm. Firms face uncertainty in their innovation activities, and the resulting heterogeneity in their labor demand makes the transferability of general skill valuable. We theoretically show that as a country catch up to the world technology frontier, firms invest more in innovation activities. This rises firms’...	Masashi Tanaka
9	2004	Why will Technical Change not be Permanently Skill-Biased? This paper directly addresses directed technical change and how R&D allocation alternates between skill-intensive and unskilled-intensive sectors, examining long-run dynamics of skill premia in an endogenous growth model. It is highly relevant to understanding how innovation direction responds to market incentives and shapes skilled labor demand over time. We contribute to the debate on skill-biased technical change by studying the long-run dynamics of skill premia in an endogenous growth model in which technical change can be directed towards different factors. We show that R&D resources tend to be directed alternately towards skill-intensive and unskilled-intensive goods, creating cycles in skill premia. If resources were constantly directed towards the same sector, an innovation in a different sector would not be threatened by future innovators. Hence, researchers are incited to switch from one sector to another, in order to avoid the negative effect of innovations constantly occurring in the same sector.	Patricia Crifo, Étienne Lehmann
9	2005	Factor Supplies and the Direction of Technological Change This paper directly examines how human capital supply influences the direction of technological change and R&D allocation across industries and countries, which is central to the project's core question of whether talent supply shapes innovation trajectories. The finding that SBTC patterns differ from R&D intensity based on skill supply relates directly to how education systems and labor availability constrain or enable specific forms of technical change. In this paper, we empirically address the hypothesis that there is a relationship between the supply of human capital and the rate and direction of skill-biased technical change (SBTC). Using country- and industry-level data on OECD countries, we find R&D to be positively related to the supply of human capital. There is, however, no indication that this translates into higher rates of SBTC, when SBTC is measured as changes in the wage bill share of skilled labour. Interestingly, both R&D and the rate of SBTC seem to be relatively high in low-skill industries in countries where the supply of human capital is relatively high.	Helena Svaleryd, Jonas Vlachos
9	2023	The Elasticity of Substitution Between Skilled and Unskilled Labor in Developing Countries: A Directed Technical Change Perspective ↗ The paper's focus on the elasticity of substitution between skill groups and how skill supply drives innovation direction precisely addresses the project's central question of whether labor supply lags constrain growth by limiting the types of innovations that become profitable. We develop a model of endogenous skill-biased technical change in developing countries. The endogenous response to a rise in skill supply counters the traditional substitution effect and dampens its role in reducing wage inequality. The model re-enforces consensus estimates of the elasticity of substitution between more/less educated workers by reconciling dispersed existing estimates. It also rationalizes estimates that were hitherto deemed implausible or model-inconsistent. We produce new estimates for developing countries with a novel global panel (finding values at or just above 2) and with Latin American data that facilitates analysis of dynamics (which reduce estimates to 1.7-1.8). We...	Alberto Behar
9	2025	Market Demand, Competition for Knowledge Workers, and Impact on Invention: Evidence from Electric Vehicle Technologies ↗ This paper directly examines how market demand shocks create competition for skilled workers with inelastic short-term supply, causing talent reallocation that constrains innovation in adjacent domains—a core mechanism in the project's framework linking labor supply rigidities to innovation direction. The empirical evidence on knowledge worker mobility and its innovation consequences provides crucial insights into how education and training system constraints shape technological adaptation and R&D allocation across sectors. Strategy and innovation scholars have long emphasized the positive role of market demand in driving innovation within a technological domain. This study sheds light on an indirect negative spillover effect of market demand on technological progress: whereas increased downstream market demand within a domain generally drives increased technological progress in that domain (i.e., the demand-relevant domain), it may also adversely affect the technological progress of firms in adjacent domains. This occurs because the increased technological progress within the demand-relevant domain, driven by the downstream market demand, can intensify competition for skilled knowledge workers—a critical...	Jino Lu
9	2026	The supply of human enhancement technologies * ↗ This paper directly addresses how private appropriability constraints shape the direction of innovation, a core theme of the project, by analyzing how firms' inability to capture intergenerational benefits distorts R&D allocation away from socially optimal technologies. The framework explicitly models how economic institutions and incentive structures affect which innovations are pursued, paralleling the project's focus on how education/training systems and skill-supply constraints influence the direction of technological change. We study the supply-side direction of innovation in human enhancement technologies whose effects are inheritable across generations or confined to the treated individual. In a three-generation framework with heterogeneous agents, binding budget constraints, uncertainty about outcomes, and the possibility of imitation by entrants, inheritability creates a distinctive appropriability problem: a single purchase generates benefits for future descendants, but firms cannot charge those future beneficiaries. This intergenerational non-appropriability can reverse the private ranking of projects relative to their social value, leading decentralized research to favor non-inheritable enhancements even...	Matteo Bizzarri, Giovanni Immordino, Fabrizio Panebianco
9	2025	The direction of innovation and work from home ↗ This paper directly addresses how external shocks (COVID-19 and work-from-home adoption) redirect innovation toward specific technologies, exemplifying the project's core theme of directed technical change and how labor market conditions shape innovation direction. The finding that firm characteristics and industry context determine adaptive capacity is particularly relevant to understanding talent supply constraints and innovation incentives during technological transitions. This study explores how allowing remote work affects firms' innovation activity. I investigate the effect of the significant shift toward working from home that occurred in response to the COVID-19 pandemic on the direction of innovation. I find that work from home has shifted the path of innovation toward technology that supports non–face-to-face communication. Using a sample of patent-holding firms, I document that firms that adopted work from home applied for more patents of non–face-to-face technologies than firms that did not offer work from home. The results are driven by smaller, younger firms in the ICT-related industry, suggesting that these firms had greater digital resilience and...	Chungeun Yoon
9	2026	Academic environment, directed technical change, and economic growth ↗ This paper directly addresses directed technical change and R&D allocation between radical and incremental innovation, examining how institutional factors (academic autonomy) shape the direction of innovation and labor allocation across research types. The model's focus on how the academic environment influences basic versus applied research and the resulting growth dynamics is central to understanding innovation direction and the skilled labor supply constraints emphasized in the project. Abstract We investigate the impact of the academic environment on directed technical change and economic growth. We develop a heterogeneous Schumpeterian growth model in which innovation is categorized into radical and incremental types. A supportive environment for academic exploration enhances scientists’ autonomy utility in basic research, thereby motivating basic research and reducing the R&D difficulty of radical innovations through knowledge spillovers. We identify two major effects of the academic environment on economic growth: a positive directed technical change effect fostering growth through radical innovation, and a negative applied research crowding-out effect. Numerical...	Ye Meng, Shiyuan Pan, Zhu Xi
9	2026	Human Capital Investment in the Age of Artificial Intelligence ↗ This paper directly examines how rapid technological change (AI) affects educational supply responses, measuring whether and how quickly degree completion adjusts to shifts in occupational demand for skills exposed to AI. It provides empirical evidence on the lag between technology-driven labor demand shifts and human capital formation—a core mechanism in the project's investigation of talent supply constraints during technological transitions. <div> This paper documents degree completion patterns in programs associated with occupations highly exposed to generative AI and examines the educational background composition of workers in these occupations. Controlling for school-level shocks, event-study estimates show that by 2024 the number of bachelor’s degrees conferred in programs associated with high occupational AI exposure increases by 5% relative to programs associated with low occupational AI exposure. Programs linked to occupations where AI is more likely to automate tasks also experience a significant increase in bachelor’s degrees conferred. This increase is most pronounced at public and R1 institutions. So far...	Zhengyi Yu
9	2006	The skill content of technological change. Some conjectures on the role of education and job-training in reducing the timing of new technology adoption. ↗ This paper directly addresses how education and on-the-job training affect the timing of technology adoption by firms, examining the skill content of technological change and the lag between technology introduction and worker skill acquisition. It explicitly explores the interplay between human capital accumulation mechanisms and technology adoption speed, which is central to understanding how training costs constrain labor supply flexibility during periods of technological change. This positional contribution has a twofold aim: the first is to explore the recent empirical literature developed around the issue of how the adoption of new technologies within the firm has changed the skill requirements of occupations; the second is to conjecture on the relationship, and on the relative sign, between technology adoption and firm sponsored onthe- job training. The basic idea is that the time-consuming dimension of the adoption process plays a direct role both in determining the profitability of the investment in new technology and in assessing the size of the productivity slowdown the firm eventually occurs after its introduction. On the extent that the timing of adoption...	Roberto Antonietti
9	2025	Field Choice, Skill Specificity, and Labor Market Disruptions ↗ This paper directly addresses how education system flexibility and field-of-study choices influence the speed of labor market adjustment to technological shocks like AI. It provides a theoretical framework linking human capital formation costs to aggregate economic responses, aligning closely with the project's focus on talent supply constraints and directed technical change. We argue that college students’ field-of-study choices significantly influence how economies respond to labor market disruptions. To do so, we develop and estimate a framework featuring forward-looking students who choose a field of study when entering college, and subsequently make decisions over occupations after graduating and entering the labor market. Different fields endow workers with distinct comparative advantages and varying costs associated with switching occupations. Simulating both a trade war and wide scale adoption of AI, we use our model to make three points. First, relative to models that ignore how new cohorts adjust their field-of-study choices, our framework predicts...	Valérie Smeets, Lin Tian, Sharon Traiberman
9	2025	Transformative and Subsistence Entrepreneurs: Origins and Impacts on Economic Growth ↗ This paper studies how individuals sort into entrepreneurship and invention-related occupations and how their interactions shape innovation and economic growth. We develop an endogenous growth model in which occupational sorting jointly determines the supply of R&D talent and entrepreneurs’ demand for it. Empirically, using Danish microdata, we show that transformative entrepreneurs—those who hire R&D workers—tend to have higher IQ and education and build faster-growing firms than other entrepreneurs. Quantitatively, the estimated model indicates that financial barriers to education misallocate talent; alleviating them through education subsidies increases both demand and supply of R&D...	Ufuk Akcigit, Harun Alp, Jeremy Pearce, et al.
9	2026	The Directions of Technical Change ↗ This paper directly addresses directional technical change and how AI adoption responds to task-specific capabilities, which is central to understanding how innovation directions shape labor demand and worker adjustment. The framework's focus on task-level adoption decisions and the extensive margin of skill requirements aligns closely with how training systems must adapt to changing technological opportunities. Generative AI is directional: it performs well in some task directions and poorly in others. Knowledge work is directional and endogenous as well: workers can satisfy the same job requirements with different mixes of tasks. We develop a high-dimensional model of AI adoption in which a worker uses a tool when it raises their output. Both the worker and the AI tool can perform a variety of tasks, which we model as convex production possibility sets. Because the tool requires supervision from the worker's own time and attention budget, adoption is a team-production decision, similar to hiring a coworker. The key sufficient statistics are the worker's pre-AI shadow prices: these equal the...	Miklós Koren, Zsófia Bárány, Ulrich Wohak
9	2026	The Directions of Technical Change This paper directly addresses how directional technical change in AI interacts with worker task allocation and adoption decisions, which is central to understanding how skilled labor supply adjusts to technology-driven shifts. The framework of how workers adopt tools based on their shadow prices and task comparative advantages provides crucial insights into the mechanisms linking innovation direction to labor market adjustment that the project examines. Generative AI is directional: it performs well in some task directions and poorly in others. Knowledge work is directional and endogenous as well: workers can satisfy the same job requirements with different mixes of tasks. We develop a high-dimensional model of AI adoption in which a worker uses a tool when it raises their output. Both the worker and the AI tool can perform a variety of tasks, which we model as convex production possibility sets. Because the tool requires supervision from the worker's own time and attention budget, adoption is a team-production decision, similar to hiring a coworker. The key sufficient statistics are the worker's pre-AI shadow prices: these equal the...	Miklós Koren, Zsófia Bárány, Ulrich Wohak
9	2026	<scp>Artificial intelligence</scp> adoption and the demand for managerial expertise ↗ This paper directly addresses how technological change (AI adoption) shapes demand for specific skilled labor (managerial expertise) and the skills required, examining the skill-biased nature of innovation and labor market adjustment mechanisms. It provides empirical evidence on how firms respond to technology adoption through changes in hiring patterns and skill requirements, which is central to understanding talent supply constraints during rapid technological change. Abstract Research Summary This paper examines how firms' adoption of artificial intelligence (AI) relates to the demand for managers and managerial skills. Using a skills‐based measure of AI adoption derived from Lightcast job postings, we show that firms with greater AI adoption post more managerial vacancies and a higher share of such vacancies than less intensive adopters. These relationships are strongest in manufacturing and among firms with higher research & development intensity. Greater AI adoption is also associated with shifts in managerial skill requirements toward interpersonal and growth‐oriented skills, including stakeholder management, creativity, and sales management, and...	Liudmila Alekseeva, José Azar, Mireia Giné, et al.
9	2026	Attention (And Money) Is All You Need: Why Universities Are Struggling to Keep AI Talent ↗ This paper directly addresses skilled labor supply dynamics in AI by documenting how education and training investments in academia compete with industry opportunities, examining talent allocation responses to wage differentials and innovation incentives. It provides empirical evidence of how talent supply constraints and the direction of innovation (open science vs. proprietary) are shaped by career incentives and labor market competition between sectors. We construct a novel dataset linking academic publication records to U.S. Census employeremployee data to track 42,000 AI researchers over two decades.We document systematic changes in the allocation of AI talent.Industry increasingly attracts younger and foreign-born researchers, while gender representation improves more in academia.The top 1% of publishing industry scientists now earn $1.5 million more annually than comparable academics, a fivefold increase since 2001.Rising wage premia coincide with greater sorting into large incumbent firms.Researchers who move to industry publish less but patent more, consistent with a shift from open science toward proprietary innovation.	Ufuk Akcigit, Craig Chikis, Emin Dinlersoz, et al.
9	2026	Attention (And Money) Is All You Need: Why Universities Are Struggling to Keep AI Talent ↗ This paper directly addresses the supply constraints of specialized labor in the context of rapid technological change, specifically focusing on the AI sector. It provides empirical evidence on how wage incentives and industry shifts affect the allocation and mobility of high-skilled talent, which is central to understanding how human capital formation adapts to technological demand. We construct a novel dataset linking academic publication records to U.S. Census employer–employee data to track 42,000 AI researchers over two decades. We document systematic changes in the allocation of AI talent. Industry increasingly attracts younger and foreign-born researchers, while gender representation improves more in academia. The top 1% of publishing industry scientists now earn $1.5 million more annually than comparable academics, a fivefold increase since 2001. Rising wage premia coincide with greater sorting into large incumbent firms. Researchers who move to industry publish less but patent more, consistent with a shift from open science toward proprietary...	Ufuk Akcigit, Craig Chikis, Emin Dinlersoz, et al.
9	2025	Technology Choice, Spillovers, and the Concentration of R&D ↗ This paper directly addresses the project's core theme of the direction of innovation and how market structure influences the allocation of R&D towards new versus incumbent technologies. It explicitly explores the transition between technology waves, such as the shift to artificial intelligence, which aligns with the research interest in how skilled labor and inventors sort across different technology paradigms. The direction of innovation shapes both current technologies and future innovation opportunities, as firms acquire expertise and create public knowledge through discovery. But how do firms choose which technologies to develop? Do they ever fail to exploit new technological paradigms? I build a new model of innovation and firm dynamics to study a novel link between market structure, the direction of innovation, and economic growth: Expertise in a current technology gives incumbents a comparative advantage at innovating it relative to entrants, who instead favor a new technology with higher growth potential. Each firm's innovation decisions influence others through knowledge spillovers, so...	Todd Lensman
9	2025	COVID-19, Low-skilled Migrants, and Automation in China ↗ This paper directly addresses the project's core theme of how labor market frictions and scarcity drive directed technical change and automation. It provides empirical evidence on the speed and direction of technological adaptation in response to labor supply shocks, which is central to understanding how talent constraints shape growth and innovation. We examine whether labor scarcity induces directed technical change by exploiting COVID-19's disruption to internal migration in China. Using household microdata, patent records, and robot installation data in a difference-indifferences framework, we find that migration-dependent regions experienced sharp increases in automation. Counties with higher pre-pandemic non-agricultural employment showed significant growth in robotics and manipulator patents while total patenting remained unchanged, indicating targeted labor-saving innovation rather than broader R&D expansion. Effects are strongest in tight labor markets with high migration dependence, inconsistent with demand shocks, health...	Jingcheng Jiang, Yalan Li
9	2024	Ai Adoption and the Talent Constraint ↗ This paper directly addresses the core theme of how education and training systems shape the flexibility of skilled labor supply to meet technology-driven demand. By empirically demonstrating that the availability of specialized talent constrains AI adoption, it provides crucial evidence for the talent supply lag mechanism central to the researcher's project. Despite the well-recognized benefits of AI for businesses, its actual adoption rate remains low.This study explores human capital availability as a barrier to AI integration. We take the newly launched Analytics and Data Science (ADS) programs over the past decade as a supply shock and examine their impact on firms' ADS job postings. The key idea behind our empirical strategy is that, if human capital availability constrains firms' AI adoption, job postings should increase following such supply shocks. Our findings reveal a significant human capital constraint, particularly among local firms hindered by the limited AI talent in the local job markets. These results underscore potential AI...	Yuanyang Liu, Wei Zheng, Missie Bowers
9	2025	Ai Adoption and the Talent Constraint ↗ [Title only] The title directly addresses the intersection of AI adoption and labor supply constraints, which is a central theme of the research project regarding how talent shortages may hinder technological progress. It likely explores the frictions and delays in skilled labor supply that traditional models overlook, fitting perfectly with the core inquiry into education and training system impacts. No abstract available.	Yuanyang Liu, Wei Zheng, Missie Bowers
8	1990	Endogenous Technological Change ↗ This foundational paper on endogenous growth through technological change directly addresses how profit-maximizing agents allocate resources to innovation and how human capital stock affects growth rates, which are central to understanding innovation direction and R&D allocation in the project. While it does not explicitly model training costs or skilled labor supply lags, it establishes the theoretical framework linking human capital accumulation to technological progress that underlies the project's core research questions about talent supply constraints on innovation. Growth in this model is driven by technological change that arises from intentional investment decisions made by profit-maximizing agents. The distinguishing feature of the technology as an input is that it is neither a conventional good nor a public good; it is a nonrival, partially excludable good. Because of the nonconvexity introduced by a nonrival good, price-taking competition cannot be supported. Instead, the equilibrium is one with monopolistic competition. The main conclusions are that the stock of human capital determines the rate of growth, that too little human capital is devoted to research in equilibrium, that integration into world markets will increase growth rates, and that...	Paul Romer
8	2003	The Skill Content of Recent Technological Change: An Empirical Exploration ↗ This paper directly addresses how technological change (computerization) shifts demand for different types of skilled labor and tasks, showing that innovation creates differential demand for workers with varying skill compositions. It provides crucial empirical evidence on the mechanisms through which technology drives changes in human capital requirements, which is central to understanding how education systems must adapt to technology-driven labor market shifts. We apply an understanding of what computers do to study how computerization alters job skill demands. We argue that computer capital (1) substitutes for workers in performing cognitive and manual tasks that can be accomplished by following explicit rules; and (2) complements workers in performing nonroutine problem-solving and complex communications tasks. Provided that these tasks are imperfect substitutes, our model implies measurable changes in the composition of job tasks, which we explore using representative data on task input for 1960 to 1998. We find that within industries, occupations, and education groups, computerization is associated with reduced labor input of routine manual...	David Autor, Frank Levy, Richard J. Murnane
8	2011	Skills, Tasks and Technologies: Implications for Employment and Earnings ↗ This paper directly addresses how technology drives shifts in skill demand across tasks and occupations, examining mechanisms of directed technical change and labor market adjustment—core themes in the project. Its task-based framework and analysis of technology-skill complementarities provide foundational theory for understanding how labor supply must adapt to technological change, though it does not explicitly model training costs or education system constraints on adjustment speed. A central organizing framework of the voluminous recent literature studying changes in the returns to skills and the evolution of earnings inequality is what we refer to as the canonical model, which elegantly and powerfully operationalizes the supply and demand for skills by assuming two distinct skill groups that perform two different and imperfectly substitutable tasks or produce two imperfectly substitutable goods. Technology is assumed to take a factor-augmenting form, which, by complementing either high or low skill workers, can generate skill biased demand shifts. In this paper, we argue that despite its notable successes, the canonical model is largely silent on a number of central...	Daron Acemoğlu, David Autor
8	2019	Automation and New Tasks: How Technology Displaces and Reinstates Labor ↗ This paper directly addresses how technological change affects labor demand through task displacement and reinstatement, which is central to understanding skilled labor supply constraints during rapid innovation. The framework's analysis of how automation shifts task content and creates new labor demands is highly relevant to examining whether and how quickly labor supply can adapt to technology-driven shifts in industry demand. We present a framework for understanding the effects of automation and other types of technological changes on labor demand, and use it to interpret changes in US employment over the recent past. At the center of our framework is the allocation of tasks to capital and labor—the task content of production. Automation, which enables capital to replace labor in tasks it was previously engaged in, shifts the task content of production against labor because of a displacement effect. As a result, automation always reduces the labor share in value added and may reduce labor demand even as it raises productivity. The effects of automation are counterbalanced by the creation of new tasks in which...	Daron Acemoğlu, Pascual Restrepo
8	2002	Technical Change, Inequality, and the Labor Market ↗ This paper directly addresses how technical change is directed toward skill-biased innovation in response to skilled labor supply conditions, a core mechanism in the project's framework of directed technical change. The essay's analysis of how changes in skill supply induce corresponding changes in innovation direction and technology adoption is highly relevant to understanding talent supply constraints and innovation incentives. This essay discusses the effect of technical change on wage inequality. I argue that the behavior of wages and returns to schooling indicates that technical change has been skill-biased during the past sixty years. Furthermore, the recent increase in inequality is most likely due to an acceleration in skill bias. In contrast to twentieth-century developments, much of the technical change during the early nineteenth century appears to be skill-replacing. I suggest that this is because the increased supply of unskilled workers in the English cities made the introduction of these technologies profitable. On the other hand, the twentieth century has been characterized by skill-biased technical...	Daron Acemoğlu
8	2002	Skill‐Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles ↗ This paper directly examines skill-biased technological change and its relationship to labor demand for skilled workers, which is central to understanding how technology drives demand for specialized labor and skilled labor supply constraints. The paper's focus on the timing mismatch between technology advances and wage inequality changes provides crucial empirical context for how labor markets adjust to technology-driven shifts in skill demand over time. The recent rise in wage inequality is usually attributed to skill-biased technical change (SBTC), associated with new computer technologies. We review the evidence for this hypothesis, focusing on the implications of SBTC for overall wage inequality and for changes in wage differentials between groups. A key problem for the SBTC hypothesis is that wage inequality stabilized in the 1990s despite continuing advances in computer technology; SBTC also fails to explain the evolution of other dimensions of wage inequality, including the gender and racial wage gaps and the age gradient in the return to education.	David Card, John DiNardo
8	2006	Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure ↗ This paper directly investigates how technological change (computerization) drives shifts in skill requirements within occupations, providing empirical evidence on the mechanism linking innovation to labor demand for skilled workers. It addresses a core project theme by examining how technology-driven changes in job tasks translate into educational demand, demonstrating the lag between technological adoption and the educational system's response to skill requirements. Empirical work has been limited in its ability to directly study whether skill requirements in the workplace have been rising and whether these changes have been related to technological change. This article answers these questions using a unique data set from West Germany that enabled me to look at how skill requirements have changed within occupations. I show that occupations require more complex skills today than in 1979 and that the changes in skill requirements have been most pronounced in rapidly computerizing occupations. Changes in occupational content account for about 36% of the recent educational upgrading in employment.	Alexandra Spitz‐Oener
8	1998	The Origins of Technology-Skill Complementarity ↗ This paper directly examines technology-skill complementarity and how technological adoption (electric motors, continuous-process methods) shapes demand for skilled labor, a core theme of the project. It also demonstrates how education supply (the high-school movement) responds to and potentially constrains wage inequality from technological change, directly addressing the project's focus on how education systems affect labor market adaptation to technological shifts. Current concern with relationships among particular technologies, capital, and the wage structure motivates this study of the origins of technology-skill complementarity in manufacturing. We offer evidence of the existence of technology-skill and capital-skill (relative) complementarities from 1909 to 1929, and suggest that they were associated with continuous-process and batch methods and the adoption of electric motors. Industries that used more capital per worker and a greater proportion of their horsepower in the form of purchased electricity employed relatively more educated blue-collar workers in 1940 and paid their blue-collar workers substantially more from 1909 to 1929. We also...	Claudia Goldin, Lawrence F. Katz
8	1999	The Structure of Wages and Investment in General Training ↗ This paper directly addresses how labor market institutions and frictions affect the financing and supply of skilled labor training, which is central to understanding how education and training costs shape labor supply flexibility. It examines the mechanisms through which wage structure distortions influence firms' incentives to invest in human capital formation, a key determinant of how quickly labor supply can respond to technological shifts. In the human capital model with perfect labor markets, firms never invest in general skills and all cost of general training are borne by workers. When lobor market frictions compress the structure of wages, firms may pay for these investments. The distortion in the wage structure turns "technologically" general skills into de facto "specific " skills. Credit market imperfections are neither neccessary nor sufficient for firm‐sponsored training. Since labor market frictions and insititutions shape the wage structure, they may have an important impact on the financing and amount of human capital investments and account for some international differences in training practices.	Daron Acemoğlu, Jörn‐Steffen Pischke
8	2023	Artificial intelligence, firm growth, and product innovation ↗ This paper directly addresses skilled labor supply constraints and innovation dynamics by measuring AI talent acquisition through resumes and instrumenting with university AI graduate supply, showing how talent availability affects firm growth and innovation direction. It is highly relevant to understanding how education system output (AI graduates) constrains technology adoption and shapes which firms can innovate, a core concern of the project regarding talent supply lags during technological change. We study the use and economic impact of AI technologies. We propose a new measure of firm-level AI investments using employee resumes. Our measure reveals a stark increase in AI investments across sectors. AI-investing firms experience higher growth in sales, employment, and market valuations. This growth comes primarily through increased product innovation. Our results are robust to instrumenting AI investments using firms' exposure to universities' supply of AI graduates. AI-powered growth concentrates among larger firms and is associated with higher industry concentration. Our results highlight that new technologies like AI can contribute to growth and superstar firms through product...	Tania Babina, Anastassia Fedyk, Alex Xi He, et al.
8	1987	The Comparative Advantage of Educated Workers in Implementing New Technology ↗ This paper directly addresses the mechanism of how human capital facilitates the adjustment to new technology, which is central to understanding the speed of skilled labor supply adaptation. It provides empirical evidence on the comparative advantage of educated workers in implementing innovations, offering key insights into the transition costs and demand shifts relevant to the project's focus on directed technical change and labor market frictions. The authors estimate labor dem and equations derived from a (restricted variable) cost function in which "experience" on a technology (proxied by the mean age of the capital stock) enters "non-neutrally." The specification of the underlying cost function isbased on the hypothesis that highly educated workers have a comparative advantage with re spect to the adjustment to, and implementation of, new technologies. The empiric al results are consistent with the implication of this hypothesis, that the rel ative demand for educated workers declines as the ages of plant and (particularl y) of equipment increase, especially in R&D-intensive industries. Copyright 1987 by MIT Press.	Ann P. Bartel, Frank R. Lichtenberg
8	2013	Has ICT Polarized Skill Demand? Evidence from Eleven Countries over Twenty-Five Years ↗ This paper directly examines how technological change (ICT adoption) shapes demand for different skill levels, demonstrating that technology drives differential labor demand across education groups—a core mechanism in the project's framework of directed technical change and skilled labor supply constraints. The finding that technology accounts for significant skill premium growth is highly relevant to understanding how innovation direction influences human capital requirements and labor market adjustment dynamics. Abstract We test the hypothesis that information and communication technologies (ICT) polarize labor markets by increasing demand for the highly educated at the expense of the middle educated, with little effect on low-educated workers. Using data on the United States, Japan, and nine European countries from 1980 to 2004, we find that industries with faster ICT growth shifted demand from middle-educated workers to highly educated workers, consistent with ICT-based polarization. Trade openness is also associated with polarization, but this is not robust to controlling for R&D. Technologies account for up to a quarter of the growth in demand for highly educated workers.	Guy Michaels, Ashwini Natraj, John Van Reenen
8	2018	Automation, skills use and training ↗ This paper directly addresses how automation shapes labor demand across occupations and investigates the role of training in facilitating worker transitions, which is central to understanding skill supply constraints during technological change. The analysis of automation risk by occupation and worker characteristics, combined with examination of training's mitigating role, provides empirical evidence relevant to understanding how education and training systems affect the pace of labor market adaptation to technology-driven shifts. This study focuses on the risk of automation and its interaction with training and the use of skills at work. Building on the expert assessment carried out by Carl Frey and Michael Osborne in 2013, the paper estimates the risk of automation for individual jobs based on the Survey of Adult Skills (PIAAC). The analysis improves on other international estimates of the individual risk of automation by using a more disaggregated occupational classification and identifying the same automation bottlenecks emerging from the experts' discussion. Hence, it more closely aligns to the initial assessment of the potential automation deriving from the development of Machine Learning. Furthermore, this...	Ljubica Nedelkoska, Glenda Quintini
8	2001	Productivity Differences ↗ This paper directly addresses how technology design reflects the skill composition of origin countries and how skill supply mismatches constrain productivity adoption, which is central to understanding how labor supply constraints affect technological diffusion and growth. The analysis of technology-skill mismatch as a barrier to technology adoption is highly relevant to the project's focus on how training systems and skilled labor supply flexibility shape innovation direction and economic adjustment. Many technologies used by the LDCs are developed in the OECD economies and are designed to make optimal use of the skills of these richer countries' workforces. Differences in the supply of skills create a mismatch between the requirements of these technologies and the skills of LDC workers, and lead to low productivity in the LDCs. Even when all countries have equal access to new technologies, this technology-skill mismatch can lead to sizable differences in total factor productivity and output per worker. We provide evidence in favor of the cross-industry productivity patterns predicted by our model, and also show that technology-skill mismatch could account for a large fraction of the...	Daron Acemoğlu, Fabrizio Zilibotti
8	2003	Patterns of Skill Premia ↗ This paper directly addresses how technology endogenously responds to skill supply changes and profit incentives, examining the feedback loop between labor supply adjustments and directed technical change—a core mechanism in the project. It demonstrates how shifts in skill supply induce skill-biased innovation, providing crucial insights into how labor market conditions shape the direction of technological progress rather than assuming instant labor adjustment. This paper develops a model to analyse how skill premia differ over time and across countries, and uses this model to study the impact of international trade on wage inequality. Skill premia are determined by technology, the relative supply of skills, and trade. Technology is itself endogenous, and responds to profit incentives. An increase in the relative supply of skills, holding technology constant, reduces the skill premium. But an increase in the supply of skills over time also induces a change in technology, increasing the demand for skills. The most important result of the paper is that increased international trade induces skill-biased technical change. As a result, trade opening...	Daron Acemoğlu
8	2023	GPTs are GPTs: An Early Look at the Labor Market Impact Potential of Large Language Models ↗ This paper directly addresses how rapid technological change (LLMs) creates shifts in skill demand across occupations and wage levels, which is central to understanding talent supply constraints and labor market adjustment lags. The finding that 47-56% of tasks could be affected by LLM-powered software exemplifies the technology-driven demand shifts that motivate the project's investigation of how quickly skilled labor supply can respond through education and training systems. We investigate the potential implications of large language models (LLMs), such as Generative Pre-trained Transformers (GPTs), on the U.S. labor market, focusing on the increased capabilities arising from LLM-powered software compared to LLMs on their own. Using a new rubric, we assess occupations based on their alignment with LLM capabilities, integrating both human expertise and GPT-4 classifications. Our findings reveal that around 80% of the U.S. workforce could have at least 10% of their work tasks affected by the introduction of LLMs, while approximately 19% of workers may see at least 50% of their tasks impacted. We do not make predictions about the development or adoption timeline...	Tyna Eloundou, Sam Manning, Pamela Mishkin, et al.
8	1962	The Rate and Direction of Inventive Activity: Economic and Social Factors. ↗ [Title only] This title directly addresses the 'direction of innovation' and 'directed technical change,' which are core themes of the research project. While it broadly covers the factors shaping inventive activity, it likely provides essential context for how social and economic incentives, rather than just labor supply frictions, drive the specific types of innovation that create demand for specialized skills. No abstract available.	Mordecai Kurz
8	2022	Tasks, Automation, and the Rise in U.S. Wage Inequality ↗ This paper directly addresses how automation and technological change drive shifts in labor demand across skill groups and tasks, examining the adjustment mechanisms that determine which worker groups experience wage declines. It is highly relevant to understanding how rapid technological change creates demand for different types of skilled labor and constrains adjustment for workers in displaced occupations, though it does not focus on the education/training system's role in facilitating labor supply responses to these shifts. We document that between 50% and 70% of changes in the U.S. wage structure over the last four decades are accounted for by relative wage declines of worker groups specialized in routine tasks in industries experiencing rapid automation. We develop a conceptual framework where tasks across industries are allocated to different types of labor and capital. Automation technologies expand the set of tasks performed by capital, displacing certain worker groups from jobs for which they have comparative advantage. This framework yields a simple equation linking wage changes of a demographic group to the task displacement it experiences. We report robust evidence in favor of this relationship and...	Daron Acemoğlu, Pascual Restrepo
8	2012	Heterogeneity in Human Capital Investments: High School Curriculum, College Major, and Careers ↗ This paper directly examines human capital formation through education choices (high school curriculum and college major) and their labor market outcomes, addressing how educational systems allocate talent across fields and occupations. It is highly relevant to understanding how education and training systems affect the pace of adaptation to changing skill demands, particularly through the lens of field-specific human capital and occupational choice dynamics. Motivated by the large differences in labor market outcomes across college majors, we survey the literature on the demand for and return to high school and postsecondary education by field of study. We combine elements from several papers to provide a dynamic model of education and occupation choice that stresses the roles of the specificity of human capital and uncertainty about preferences, ability, education outcomes, and labor market returns. The model implies an important distinction between the ex ante and ex post returns to education decisions. We also discuss some of the econometric difficulties in estimating the causal effects of field of study on wages in the context of a...	Joseph G. Altonji, Erica Blom, Costas Meghir
8	1996	Learning by Doing and the Choice of Technology ↗ This paper directly examines how human capital accumulation and switching costs between technologies affect technological adoption and growth dynamics, which is central to understanding how training and skill-specificity constrain the pace of labor supply adjustment to new technologies. The model's insight that human capital loss during technology transitions can impede growth is highly relevant to the project's focus on how education/training costs shape labor flexibility and innovation incentives. This paper explores a one-agent Bayesian model of learning by doing and technological choice.To produce output, the agent can choose among various technologies.The beneficial effects of learning by doing are bounded on each technology, and so long-run growth in output can take place only if the agent repeatedly switches to better technologies.As the agent repeatedly uses a technology, he learns about its unknown parameters, and this accumulated expertise is a form of human capital.But when the agent switches technologies, part of this human capital is lost.It is this loss of human capital that may prevent the agent from moving up the quality ladder of technologies as quickly as he can...	Boyan Jovanovic, Yaw Nyarko
8	1997	Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis ↗ This paper directly examines skill-biased technological change and the relationship between capital accumulation, skilled labor supply, and innovation direction through a macroeconomic framework. It addresses how technological change shapes demand for skilled versus unskilled labor and how factor quantities interact with innovation, which is central to understanding how education and training systems must adapt to technology-driven shifts in labor demand. There have been striking postwar changes in the supply and price of skilled labor relative to unskilled labor. The relative quantity of skilled labor has increased substantially, and the skill premium, which is the wage of skilled labor relative to unskilled labor, has grown significantly since 1980. Many studies have found that it is difficult to account for the increase in the skill premium on the basis of observable variables and have concluded that latent "skill-biased technological change" is the main factor responsible for the increase. This paper develops a framework that provides a simple, explicit economic mechanism for understanding skill-biased technological change in terms of...	Per Krusell, Lee E. Ohanian, José-V́ıctor Ŕıos-Rull, et al.
8	1998	Does Government R&D Policy Mainly Benefit Scientists and Engineers? This paper directly addresses how government R&D policy affects the skilled labor supply of scientists and engineers, demonstrating inelastic labor supply constraints that limit innovation effectiveness—a core concern for understanding talent supply lags and training bottlenecks. The findings on wage crowding-out and labor market frictions in R&D occupations are highly relevant to the project's examination of how education/training costs shape skilled labor flexibility and constrain growth during technological change. Conventional wisdom holds that the social rate of return to R&D significantly exceeds the private rate of return and, therefore, R&D should be subsidized. In the U.S., the government has directly funded a large fraction of total R&D spending. This paper shows that there is a serious problem with such government efforts to increase inventive activity. The majority of R&D spending is actually just salary payments for R&D workers. Their labor supply, however, is quite inelastic so when the government funds R&D, a significant fraction of the increased spending goes directly into higher wages. Using CPS data on wages of scientific personnel, this paper shows that government R&D spending raises...	Austan Goolsbee
8	2019	Economics of Artificial Intelligence: Implications for the Future of Work ↗ This paper directly addresses AI's impact on skill demand, labor market adjustment, and the role of skills policies in shaping technological outcomes—core concerns of the project. It examines how AI-driven technological change affects inequality and labor market outcomes, highlighting that skills policies alone are insufficient, which relates to the project's focus on education and training systems' constraints on labor supply adaptation during rapid technological change. Abstract The current wave of technological change based on advancements in artificial intelligence (AI) has created widespread fear of job loss and further rises in inequality. This paper discusses the rationale for these fears, highlighting the specific nature of AI and comparing previous waves of automation and robotization with the current advancements made possible by a widespread adoption of AI. It argues that large opportunities in terms of increases in productivity can ensue, including for developing countries, given the vastly reduced costs of capital that some applications have demonstrated and the potential for productivity increases, especially among the low skilled. At the same...	Ekkehard Ernst, Rossana Merola, Daniel Samaan
8	2020	Earnings Dynamics, Changing Job Skills, and STEM Careers* ↗ This paper directly addresses how skill demand changes constrain labor market adjustment by measuring occupation-specific skill shifts and showing how earnings dynamics respond to skill obsolescence. It demonstrates that workers in rapidly-changing fields like STEM experience steeper human capital depreciation, revealing a key mechanism linking technological change to labor supply flexibility and career choices—core concerns of the project's focus on talent supply lags and training responsiveness. Abstract This article studies the impact of changing job skills on career earnings dynamics for college graduates. We measure changes in the skill content of occupations between 2007 and 2019 using detailed job descriptions from a near universe of online job postings. We then develop a simple model where the returns to work experience are a race between on-the-job learning and skill obsolescence. Obsolescence lowers the return to experience, flattening the age-earnings profile in faster-changing careers. We show that the earnings premium for college graduates majoring in technology-intensive subjects such as computer science, engineering, and business declines rapidly, and that these...	David Deming, Kadeem Noray
8	2007	Equilibrium Bias of Technology ↗ This paper directly addresses how factor supply changes induce biased technological change, which is central to understanding how skilled labor supply affects the direction of innovation and technology development. The analysis of equilibrium bias mechanisms is highly relevant to the project's core theme of directed technical change and how labor supply constraints shape innovation trajectories across sectors and skill levels. This paper presents three sets of results about equilibrium bias of technology. First, I show that when the menu of technological possibilities only allows for factor-augmenting technologies, the increase in the supply of a factor induces technological change relatively biased toward that factor—meaning that the induced technological change increases the relative marginal product of the factor becoming more abundant. Moreover, this induced bias can be strong enough to make the relative marginal product of a factor increasing in response to an increase in its supply, thus leading to an upward-sloping relative demand curve. I also show that these results about relative bias do not generalize...	Daron Acemoğlu
8	2004	Skill-Specific rather than General Education: A Reason for US–Europe Growth Differences? ↗ [Title only] This paper directly addresses the core theme of how education systems affect the pace of adaptation to technological change by contrasting specific versus general training models. It provides theoretical insight into how human capital formation frictions might constrain labor supply flexibility and explain growth disparities, aligning with the project's focus on talent supply lags. No abstract available.	Dirk Krueger, Krishna B. Kumar
8	2019	Consider This: Training, Wages, and the Enforceability of Covenants Not to Compete ↗ This paper directly addresses the project's focus on education and training costs by providing empirical evidence on how labor market frictions, specifically noncompete agreements, influence firm-sponsored training and skilled labor supply. It offers crucial insights into the mechanisms that may constrain labor flexibility and adaptation speeds, aligning closely with the themes of training systems and technology-driven demand shifts. Using data from the Survey of Income and Program Participation, the author examines the effect of noncompete enforceability on employee training and wages. An increase from no enforcement of noncompetes to mean enforceability is associated with a 14% increase in training, which tends to be firm-sponsored and designed to upgrade or teach new skills. In contrast to theoretical expectations, the results show no evidence of a relationship between noncompete enforceability and self-sponsored training. Despite the increases in training, an increase from non-enforcement of noncompetes to mean enforceability is associated with a 4% decrease in hourly wages. Consistent with reduced bargaining power...	Evan Starr
8	2005	The Role of Human Capital and Population Growth in R&D‐based Models of Economic Growth* ↗ Abstract Human capital accumulation is introduced in a growth model with R&D‐driven expansion in variety and quality of intermediate goods and knowledge spillovers from both research activities. Economic growth is no longer uniquely tied to population growth as previous growth models without scale effects suggest. The model predicts that economic growth depends positively on the rate of human capital accumulation and positively or negatively on population growth and is therefore supported by empirical evidence to a greater extent than previous models. In particular, long‐run growth is compatible with a stable population.	Holger Strulik
8	2000	Intelligence, Social Mobility, and Growth ↗ This paper directly addresses how technological growth endogenously shapes skill demand and human capital allocation, which is central to understanding talent supply constraints during rapid innovation. The mechanism linking cognitive ability requirements to growth rates and the analysis of how educational/allocation systems affect innovation incentives aligns closely with the project's core focus on skilled labor supply bottlenecks in periods of technological change. We develop a model where the allocation of human resources, intergenerational social mobility, and technological growth are jointly determined. High growth endogenously increases the equilibrium return to innate cognitive ability and makes the allocation of individuals depend more on innate ability and less on social background. Individuals with a higher level of innate cognitive ability can deal better with less known, but more productive, technologies and thus choose a higher rate of technological growth. A social allocation based on innate ability and high growth will thus reinforce each other, implying the possibility of multiple endogenous growth equilibria. (JEL J62, O1)	John Hassler, José V. Rodrı́guez Mora
8	2012	The Rate and Direction of Inventive Activity Revisited ↗ This volume directly addresses the rate and direction of inventive activity, examining how institutional environments and R&D allocation between public and private sectors shape innovation—core mechanisms in the project's framework of directed technical change. The discussion of how innovation incentives and knowledge diffusion systems affect technological development is highly relevant to understanding what drives shifts in labor demand across sectors and skills. While the importance of innovation to economic development is widely understood, the conditions conducive to it remain the focus of much attention. This volume offers new contributions to fundamental questions relating to the economics of innovation and technological change. Central to the development of new technologies are institutional environments, and among the topics discussed are the roles played by universities and other nonprofit research institutions and the ways in which the allocation of funds between the public and private sectors affects innovation. Other essays examine the practice of open research and how the diffusion of information technology influences knowledge...	Josh Lerner, Scott Stern
8	2010	Markets for Inventors: Learning-by-Hiring as a Driver of Mobility ↗ This paper directly investigates inventor mobility and the characteristics of knowledge that drive transitions between firms, addressing the project's interest in cross-technology switching and talent supply dynamics. It provides empirical evidence on how specific types of human capital influence labor market adjustments, which is central to understanding the constraints on skilled labor flexibility during technological shifts. Hiring away inventors has long been recognized as a way of learning used by innovative firms. This paper claims that the characteristics of the knowledge accumulated by an inventor at his current employer affect what hiring firms can learn from him. The implication is that some inventors are more likely to be hired away than their coworkers. We analyze the relationship between the type of knowledge embodied by inventors working at IBM and their probability of moving. Relying on patent data to track the movement of inventors across firms and to characterize the kind of know-how they hold, we identify the following drivers of inventor mobility: the quality of their work; the complementarity...	Neus Palomeras, Eduardo Melero
8	2013	The past and future of knowledge-based growth ↗ This paper directly addresses the relationship between education, R&D-based innovation, and endogenous growth, showing how human capital formation and workforce education drive productivity growth in modern economies. It is highly relevant as it examines how education systems enable innovation and growth, which connects closely to the project's core focus on how education and training systems affect the pace of technological adaptation and skilled labor supply dynamics. This paper consolidates two previously disconnected literatures. It integrates R&D-based innovations into a unified growth framework with micro-founded fertility and schooling behavior. The theory suggests a refined view on the human factor in productivity growth. It helps to explain the historical emergence of R&D-based growth and the subsequent emergence of mass education and the demographic transition. The model predicts that the erstwhile positive correlation between population growth and innovative activity turns negative during economic development. This "population-productivity reversal" explains why innovative modern economies are usually characterized by low or negative population...	Holger Strulik, Klaus Prettner, Alexia Prskawetz
8	1995	Learning, Matching and Growth ↗ This paper directly addresses endogenous growth with labor market frictions and human capital formation, examining how education investment affects both individual productivity and aggregate growth through on-the-job learning. It is highly relevant to the project's core focus on how education and training systems constrain labor supply adjustment and shape the pace of technological adaptation. We examine an endogenous growth model in which market frictions are an integral part of the economic environment. Workers invest in education when young, which raises their productivity once employed. The level of schooling also acts as a key determinant of the rate of economic growth by influencing workers' ability to accumulate additional human capital on-the-job. Once schooling is completed, workers search for employment. The division of the surplus between vacancies and searching workers is characterized, as is the optimal level of education. The economy may display multiple steady-state growth paths.	Derek Laing, Theodore Palivos, Ping Wang
8	1998	Growth, welfare, and trade in an integrated model of human-capital accumulation and research ↗ This paper directly addresses endogenous growth with human capital accumulation and R&D allocation, examining how human capital formation affects long-run growth dynamics and policy responsiveness. It is highly relevant to the project's focus on how education and training systems interact with innovation and skilled labor supply constraints in determining economic growth trajectories. R&D-based models of growth predict an unrealistic degree of responsiveness of long-run growth rates to policy changes. The present paper "exogenizes" the equilibrium growth rate in the Grossman-Helpman model by endogenizing human capital along the lines proposed by Uzawa and Lucas: the pace of long-run growth is unaffected by R&D subsidies, flat-rate taxes, basic research, and - in highly developed countries - by cross-border knowledge spillovers and international trade. A complete dynamic analysis is performed.	Lutz G. Arnold
8	2001	R&D, Education, and Productivity: A Retrospective This retrospective directly examines how education (human capital formation), R&D investment, and technological change contribute to economic growth and productivity, which are core to understanding how labor supply and innovation interact. The book's focus on the productivity slowdown and measurement of technical change relates closely to the project's interest in whether skill supply constraints and training lags affect the pace of technology adoption and growth during periods of technological change. Zvi Griliches was a modern master of empirical economics. In this short book, he recounts what he and others have learned about sources of economic growth. This book conveys way he tackled research problems. For Griliches, economic theorizing without measurement is merely fashioning of parables, but measurement without theory is blind. Judgement enables one to strike right balance. The book begins with economists' first attempts to productivity growth systematically in 1930s. In mid-1950s these efforts culminated in a startling puzzle. The growth of measured inputs like labour and capital explained only a fraction of growth of national output. Economists called this phenomenon efficiency or...	Zvi Griliches
8	2024	New Frontiers: The Origins and Content of New Work, 1940–2018 ↗ This paper directly examines how technological change drives labor demand shifts and new occupational emergence, with explicit analysis of labor-augmenting versus labor-automating innovations and their differential effects on skilled labor demand. It provides crucial empirical evidence on the dynamic adjustment of labor supply through occupational reallocation in response to innovation, which is central to understanding whether and how quickly skilled labor supply can respond to technology-driven industry shifts. Abstract We answer three core questions about the hypothesized role of newly emerging job categories (“new work”) in counterbalancing the erosive effect of task-displacing automation on labor demand: what is the substantive content of new work, where does it come from, and what effect does it have on labor demand? We construct a novel database spanning eight decades of new job titles linked to U.S. Census microdata and to patent-based measures of occupations’ exposure to labor-augmenting and labor-automating innovations. The majority of current employment is in new job specialties introduced since 1940, but the locus of new-work creation has shifted from middle-paid production and clerical...	David Autor, Caroline Chin, Anna Salomons, et al.
8	2019	Paul Romer: Ideas, Nonrivalry, and Endogenous Growth ↗ This paper reviews Romer's foundational work on endogenous technological change and how profit-maximizing R&D allocation drives innovation, which is directly relevant to understanding how the direction of innovation responds to economic incentives. The framework of endogenous growth through idea creation provides essential theoretical background for analyzing how technology-driven demand shifts create incentives for skilled labor supply and training investments. Abstract In 2018, Paul Romer and William Nordhaus shared the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. Romer was recognized “for integrating technological innovations into long‐run macroeconomic analysis”. This article reviews his prize‐winning contributions. Romer, together with others, rejuvenated the field of economic growth. He developed the theory of endogenous technological change, in which the search for new ideas by profit‐maximizing entrepreneurs and researchers is at the heart of economic growth. Underlying this theory, he pinpointed that the nonrivalry of ideas is ultimately responsible for the rise in living standards over time.	Charles I. Jones
8	2023	Technological Change and the Consequences of Job Loss ↗ This paper directly addresses how technological change affects labor market adjustment and skill mismatches, showing that workers struggle to acquire new skills demanded by technological shifts and consequently experience persistent earnings losses. It is highly relevant to understanding skilled labor supply constraints and how education/training lags create frictions in labor market adaptation to technology-driven demand shifts. We examine the role of technological change in explaining the large and persistent decline in earnings following job loss. Using detailed skill requirements from the near universe of online vacancies, we estimate technological change by occupation and find that technological change accounts for 45 percent of the decline in earnings after job loss. Technological change lowers earnings after job loss by requiring workers to have new skills to perform newly created jobs in their prior occupation. When workers lack the required skills, they move to occupations where their skills are still employable but are paid a lower wage. (JEL J24, J31, J63, O33)	J. Carter Braxton, Bledi Taska
8	2002	Path Dependence, Endogenous Innovation, and Growth* ↗ This paper directly addresses endogenous innovation and how the historical direction of technological change constrains future innovation opportunities, which is central to understanding how technology-driven shifts in skill demand emerge. The model's treatment of path dependence and cycles in innovation is highly relevant to explaining why labor supply may lag behind technological opportunities—certain innovation paths may be reinforced while others are foreclosed, affecting the skill demand trajectories the labor market must adapt to. The article presents a model of endogenous innovation and growth, in which technological change is path dependent. The historical pattern of technological development plays a central role in determining the pace of future technological change. Path dependence is explained using a distinction between fundamental and secondary knowledge. The economy moves endogenously between periods of drastic and nondrastic innovation. Technological lock‐in is shown to be a special case of path dependence. The model provides a rationale for cycles in technological leadership. This rationale exists in equilibria with positive levels of fundamental research and in a world with no imitation.	Stephen J. Redding
8	2004	The Engineering Labor Market ↗ This paper directly examines skilled labor supply dynamics and occupational choice in engineering, demonstrating how enrollment decisions respond to career prospects and market conditions—core mechanisms in understanding talent supply constraints and labor market adjustment to demand shifts. It provides empirical evidence on the responsiveness of human capital formation to economic incentives, relevant to understanding whether education systems can adapt quickly to technology-driven demand changes. This paper develops a dynamic supply and demand model of occupational choice and applies it to the engineering profession. The model is largely successful in understanding data in the U.S. engineering labor market. The engineering market responds strongly to economic forces. The demand for engineers responds to the price of engineering services and demand shifters. More important, supply and enrollment decisions are remarkably sensitive to career prospects in engineering. Also a rational model, in which students use some forward‐looking elements to forecast future demand for engineers, fits the data reasonably well. These findings suggest that subsidies to build technical talent ahead of...	Jaewoo Ryoo, Sherwin Rosen
8	2000	Technical Change, Inequality, and the Labor Market ↗ This paper directly examines how technical change direction responds to skilled labor supply dynamics, arguing that skill-bias in innovation is endogenously driven by changes in the relative supply of skilled workers. It provides historical evidence and theoretical grounding for the project's core premise that innovation direction is shaped by labor supply constraints and human capital availability, making it highly relevant to understanding technology-driven shifts in labor demand and skill formation feedback loops. This essay discusses the effect of technical change on wage inequality. I argue that the behavior of wages and returns to schooling indicates that technical change has been skill-biased during the past sixty years. Furthermore, the recent increase in inequality is most likely due to an acceleration in skill bias. In contrast to twentieth century developments, most technical change during the nineteenth century appears to be skill-replacing. I suggest that this is because the increased supply of unskilled workers in the English cities made the introduction of these technologies profitable. On the other hand, the twentieth-century has been characterized by skill-biased technical change...	Daron Acemoğlu
8	2020	Multidimensional Skill Mismatch ↗ This paper directly addresses how skill mismatches between worker abilities and occupational requirements affect productivity and wages, with implications for human capital accumulation and occupational mobility that are central to understanding labor supply flexibility. The dynamic model of occupational choice with multidimensional skills and learning about ability is highly relevant to how training costs and skill acquisition constraints shape the pace of labor market adjustment to technological change. What determines the earnings of a worker relative to his peers in the same occupation? What makes a worker fail in one occupation but succeed in another? More broadly, what are the factors that determine the productivity of a worker-occupation match? To help answer questions like these, we propose an empirical measure of multidimensional skill mismatch that is based on the discrepancy between the portfolio of skills required by an occupation and the portfolio of abilities possessed by a worker for learning those skills. This measure arises naturally in a dynamic model of occupational choice and human capital accumulation with multidimensional skills and Bayesian learning about one’s ability...	Fatih Guvenen, Burhan Kuruscu, Satoshi Tanaka, et al.
8	2009	Innovation and skills from a sectoral perspective: a linked employer–employee analysis ↗ This paper directly examines how skilled labor composition (education, occupation, experience) affects innovation performance across sectors, providing empirical evidence on the relationship between human capital endowment and innovation outcomes. It is highly relevant to understanding how skill supply and sectoral innovation patterns interact, though it focuses on static cross-sectional relationships rather than dynamic labor supply adjustment or training constraints. Science and engineering skills as well as management and leadership skills are often referred to as sources of innovative activities within companies. Broken down into sectoral innovation patterns, this article examines the role of formal education, actual occupation and work experience in the innovation performance in manufacturing firms within a probit model. It uses unique micro data for Germany (LIAB) that contain information about corporate innovation activities and the qualification of employees in terms of formal education, actual professional status and work experience. We find clear differences in the human capital endowment between sectors according to the Pavitt classification...	Lutz Schneider, Jutta Günther, Bianca Brandenburg
8	2014	The Declining Fortunes of the Young Since 2000 ↗ The paper directly investigates entry cohort effects and how wage and employment outcomes vary based on the timing of specialization, a core theme of the project. It provides empirical evidence on how labor market adaptation and talent allocation respond to shifts in technology-driven demand for cognitive tasks. We document that successive cohorts of college and post-college degree graduates experienced an increase in the probability of obtaining cognitive jobs both at the start of their careers and with time in the labor market in the 1990s. However, this pattern reversed for cohorts entering after 2000; profiles of the proportion of a cohort in cognitive occupations since school completion fall and become flatter with successive cohorts. Since cohort-wage profiles display a similar pattern, these findings appear to fit with a strong increase in demand for cognitive tasks in the 1990s followed by a decline in the 2000s.	Paul Beaudry, David A. Green, Benjamin Sand
8	2019	Engineering Value: The Returns to Technological Talent and Investments in Artificial Intelligence ↗ This paper directly examines skilled labor supply (engineers and AI talent) and their returns to firms, measuring how technological talent investments correlate with firm value and innovation outcomes. It provides empirical evidence on labor market dynamics in AI and technology sectors, highly relevant to understanding how talent availability and specialization affect innovation direction and firm growth during technological transitions. Engineers, as implementers of technology, are highly complementary to the intangible knowledge assets that firms accumulate. This paper seeks to address whether technical talent is a source of rents for corporate employers, both in general and in the specific case of the surprising open-source launch of TensorFlow, a deep learning software package, by Google. First, I present a simple model of how employers can use job design as a tool to exercise monopsony power by partially allocating employee time to firm-specific tasks. Then, using over 180 million position records and over 52 million skill records from LinkedIn, I build a panel of firm-level investment in technological human capital...	Daniel Rock
8	2010	A Quantitative Analysis of the Evolution of the U.S. Wage Distribution, 1970–2000 ↗ This paper directly addresses how skill-biased technical change affects human capital accumulation decisions and labor supply responses, examining the lag between technological shifts and educational adjustments through an overlapping-generations framework. It quantifies how individuals' ability to accumulate human capital and their expectations about future skill demand shape wage inequality dynamics, which is central to understanding talent supply constraints during technological transitions. In this paper, we construct a parsimonious overlapping-generations model of human capital accumulation and study its quantitative implications for the evolution of the U.S. wage distribution from 1970 to 2000. A key feature of the model is that individuals differ in their ability to accumulate human capital, which is the main source of wage inequality in this model. We examine the response of this model to skill-biased technical change (SBTC), which is modeled as an increase in the trend growth rate of the price of human capital starting in the early 1970s. The model displays behavior that is consistent with several important trends observed in the US data, including the rise in overall...	Fatih Guvenen, Burhanettin Kuruşçu
8	2018	STEM Careers and the Changing Skill Requirements of Work ↗ The paper directly addresses the project's focus on technology-specific human capital and the transition costs workers face as skills become obsolete during technological shifts. It provides empirical evidence on how rapid changes in job requirements affect the supply of specialized labor and the timing of specialization within technology waves. Science, Technology, Engineering, and Math (STEM) jobs are a key contributor to economic growth and national competitiveness. Yet STEM workers are perceived to be in short supply. This paper shows that the "STEM shortage" phenomenon is explained by technological change, which introduces new job skills and makes old ones obsolete. We find that the initially high economic return to applied STEM degrees declines by more than 50 percent in the first decade of working life. This coincides with a rapid exit of college graduates from STEM occupations. Using detailed job vacancy data, we show that STEM jobs change especially quickly over time, leading to flatter age-earnings profiles as the skills...	David Deming, Kadeem Noray
8	2017	Skill-Biased Technical Change and Regional Convergence This paper directly addresses skill-biased technical change and its effects on labor market outcomes, examining how SBTC shapes regional wage dynamics and skill premium evolution across time and space. It is highly relevant to understanding how technological change drives demand for specialized skills and creates spatial disparities in talent demand, which relates closely to the project's focus on how technology-driven shifts affect skilled labor supply adaptation and regional capacity constraints. Poorer US cities were catching up with richer ones at an annual rate of roughly 1.4% between 1940 and 1980. However, wage convergence across US cities went from 1.4% a year between 1940 and 1980 to 0% a year between 1980 and 2010. This paper quantifies the contributions of skill-biased technical change (SBTC) and agglomeration economies to the end of cross-cities wage convergence within the US between 1980 and 2010. I develop and estimate a dynamic spatial equilibrium model that looks at the causes of the decline in spatial wage convergence. The model choice is motivated by novel empirical regularities regarding the evolution of the skill premium and migration patterns over time and across...	Elisa Giannone
8	2017	ENDOGENOUS TECHNICAL CHANGE IN ALTERNATIVE THEORIES OF GROWTH AND DISTRIBUTION ↗ This paper directly examines endogenous technical change and how labor market conditions (including labor market tightness) shape the direction of innovation, which aligns closely with the project's focus on directed technical change and skilled labor supply constraints. The survey's analysis of how innovation responds to labor market conditions and income distribution provides theoretical grounding relevant to understanding how talent supply affects innovation incentives and the pace of technological adaptation. Abstract This paper surveys the last two and a half decades of non‐neoclassical literature on endogenous technical change and the functional income distribution. We distinguish between classical‐Marxian and post‐Keynesian models, and analyze them under three different assumptions on the determinants of technical change: capital accumulation, income distribution, and labor market tightness. The balanced growth implications of alternative models are compared with neoclassical exogenous and endogenous growth theories. Despite the strong differences in the assumptions regarding the substitutability between capital and labor, the role of different classes in society, and whether or not...	Daniele Tavani, Luca Zamparelli
8	1997	The Skill Bias of Technological Change in Canadian Manufacturing Industries ↗ This paper directly examines skill bias in technological change and how innovation affects demand for different labor classes, which is central to understanding directed technical change and labor market adjustment. The empirical evidence on skill-using versus skill-neutral innovation patterns provides concrete data on how technology shifts labor demand across skill categories, a key mechanism in the project's framework on talent supply constraints during technological transitions. The paper tests whether technological change has been neutral in Canadian manufacturing industries, using a system of translog cost share equations for 1962 through 1986. The model features two classes of labor treated as distinct inputs. Tests rejected homotheticity in all industries. Hicks neutrality was also rejected in 16 of 18 industries. The most common pattern of nonneutral technical change was a bias away from blue-collar workers. Formal tests for skill-neutral innovation rejected the hypothesis in ten industries in favor of skill-using technical change. The results suggest that in studies of Canadian manufacturing, aggregation across labor inputs is inappropriate.	Julian R. Betts
8	2002	Upstairs, Downstairs: Computers and Skills on Two Floors of a Large Bank ↗ This paper directly examines how technological change (computerization) affects skill demand and labor market adjustment through a detailed case study of organizational responses to automation. It provides empirical evidence on task-based skill dynamics and management's role in reshaping job organization, which is highly relevant to understanding how training costs and labor supply flexibility respond to technology-driven shifts in skill requirements. Many empirical studies document a positive correlation between workplace computerization and the employment of skilled labor in production.Does this mean that computers necessarily substitute for the tasks performed by less educated workers and complement the tasks performed by more educated workers?We explore this question by positing that computerization leads to the automation of tasks that can be fully described in terms of procedural or 'rules-based' logic.This process typically leaves many tasks to be performed by humans.Management decisions play a key role -at least in the short run -in determining how these tasks are organized into jobs, with potentially significant implications for...	David Autor, Frank Levy, Richard J. Murnane
8	2015	Do completed college majors respond to changes in wages? ↗ This paper directly addresses how labor market signals (wages) drive human capital formation decisions (college major choice), which is central to understanding skilled labor supply responsiveness to demand shifts. The findings on lag times between wage signals and major completion, plus heterogeneous responses across demographic groups, provide empirical evidence on the speed and constraints of labor supply adjustment—key mechanisms in the project's framework linking training costs to supply flexibility. In an analysis connecting labor market earnings to college major choices, we find statistically significant relationships between changes in wages by occupation and subsequent changes in college majors completed in related fields of college study between 1982 and 2012. College majors (defined at a detailed level) are most strongly related to wages observed three years earlier, when students were college freshmen. The responses to wages vary depending on the extent to which there is a strong mapping of majors into particular occupations. We also find that women, blacks, Hispanics, and students with low test scores are less likely to respond to wage changes. These findings have implications...	Mark C. Long, Dan Goldhaber, Nick Huntington‐Klein
8	2022	The Past and Future of Economic Growth: A Semi-Endogenous Perspective ↗ This paper directly addresses endogenous growth theory and the role of research effort in driving long-run growth, with explicit discussion of how educational attainment affects growth dynamics and the future supply of skilled researchers. It also considers how AI might augment or replace researchers, touching on talent supply constraints and skill demand shifts that are central to the project's examination of labor supply flexibility in response to technological change. The nonrivalry of ideas gives rise to increasing returns, a fact celebrated in Paul Romer's recent Nobel Prize. An implication is that the long-run rate of economic growth is the product of the degree of increasing returns and the growth rate of research effort; this is the essence of semi-endogenous growth theory. This review interprets past and future growth from a semi-endogenous perspective. For 50+ years, US growth has substantially exceeded its long-run rate because of rising educational attainment, declining misallocation, and rising (global) research intensity, implying that frontier growth could slow markedly in the future. Other forces push in the opposite direction. First is the...	Charles I. Jones
8	2002	Information Technology, Workplace Organization, and the Demand for Skilled Labor: Firm-Level Evidence ↗ This paper directly examines how technological change (IT) drives demand for skilled labor and investigates the complementarities between innovation, organizational change, and skill requirements—core concerns of the project. It provides empirical evidence on the mechanisms through which technology shifts labor demand toward skilled workers, relevant to understanding constraints on talent supply adaptation during technological transitions. We investigate the hypothesis that the combination of three related innovations—1) information technology (IT), 2) complementary workplace reorganization, and 3) new products and services—constitute a significant skill-biased technical change affecting labor demand in the United States. Using detailed firm-level data, we find evidence of complementarities among all three of these innovations in factor demand and productivity regressions. In addition, firms that adopt these innovations tend to use more skilled labor. The effects of IT on labor demand are greater when IT is combined with the particular organizational investments we identify, highlighting the importance of IT-enabled...	Timothy F. Bresnahan, Erik Brynjolfsson, Lorin M. Hitt
8	2003	Off and running? Technology, trade and the rising demand for skilled workers in Latin America This paper directly examines skill-biased technological change and how demand for skilled labor responds to technology adoption and trade-driven innovation, with evidence that technology transmission through imports drives skill demand increases. While it focuses on labor demand rather than supply constraints or training costs, it provides crucial empirical context on how technological shifts create differential demand for skilled workers across sectors and countries—a core mechanism in the project's framework. The authors describe the evolution of \n relative wages in five Latin American countries-Argentina, \n Brazil, Chile, Colombia, and Mexico. They use repeated \n cross-sections of household surveys, and decompose the \n evolution of relative wages into factors associated with \n changes in relative supply and relative demand. The authors \n have three main conclusions: 1) Increases in the relative \n wages of the most skilled (university-educated) workers took \n place concurrently with increases in their relative \n abundance in all of the countries except Brazil. This is \n strong evidence of increases in the demand for skilled \n workers. 2) Increases in the wage bill of skilled workers...	Carolina Sánchez-Páramo, Norbert Schady
8	2014	Transition to Clean Technology ↗ This paper directly addresses directed technical change and R&D allocation between competing technologies, core themes of the project, and examines how policy affects the direction and pace of innovation. While focused on clean vs. dirty technology rather than skill-biased innovation, it provides essential framework for understanding how innovation direction responds to incentives and how technological trajectories create path dependencies that constrain rapid transitions. We develop a microeconomic model of endogenous growth where clean and dirty technologies compete in production and innovation-in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more advanced to start with, the potential transition to clean technology can be difficult both because clean research must climb several rungs to catch up with dirty technology and because this gap discourages research effort directed towards clean technologies. Carbon taxes and research subsidies may nonetheless encourage production and innovation in clean technologies, though the transition will typically be slow. We characterize certain general properties...	Daron Acemoğlu, Ufuk Akcigit, Douglas Hanley, et al.
8	2002	The U.S. Technology Frontier ↗ This paper directly examines how technologies are chosen based on factor abundance, showing that as skilled labor and capital become more abundant in the U.S., firms adopt technologies that maximize efficiency of these inputs—a core mechanism of directed technical change. The finding that unskilled labor efficiency declined after the 1970s while skilled labor efficiency rose provides empirical evidence of how technology adoption responds to changing factor supplies, directly relevant to understanding innovation direction and labor market adjustment dynamics. In Caselli and Coleman (2000) we developed a framework that separately identifies the efficiency units embodied in unskilled labor, skilled labor, and capital in a country’s aggregate production function. Applying that framework to cross-country data, we showed that countries where unskilled labor is relatively abundant are those with the most efficient unskilled workers, while countries where skilled labor and capital are abundant are the most efficient users of these inputs. We interpreted these findings as evidence of appropriatetechnology adoption: in each country firms choose from a menu of technologies; different technologies imply different combinations of values for the efficiency...	Francesco Caselli, Wilbur John Coleman
8	2008	College majors and the knowledge content of jobs ↗ This paper directly examines how students allocate human capital investment across fields of study in response to labor market knowledge demands and wage returns, which is central to understanding skilled labor supply flexibility and education system responsiveness. The empirical framework linking educational choices to job knowledge content provides concrete evidence of how education systems adapt to technological shifts in labor demand, a key mechanism in the project's analysis of talent supply lags during periods of rapid change. College students select majors for a variety of reasons, including expected returns in the labor market. This paper demonstrates an empirical method linking a census of US degrees and fields of study with measures of the knowledge content of jobs. The study combines individual wage and employment data from the Current Population Survey (CPS) with ratings on 27 knowledge content areas from the Occupational Information Network (O*NET), thus providing measures of the economy-wide knowledge content of jobs. Fields of study and corresponding BA degree data from the Digest of Education Statistics for 1976-1977 through 2001-2002 are linked to these 27 content areas. We find that the choice of...	James A. Freeman, Barry T. Hirsch
8	2015	LABOR MARKET SEARCH AND SCHOOLING INVESTMENT ↗ This paper directly examines how labor market frictions affect human capital investment decisions and schooling acquisition, which is central to understanding how training costs and labor market structure shape skilled labor supply responses. The general equilibrium framework linking schooling investment to matching frictions and wage bargaining provides crucial insights into why talent supply may not adjust efficiently to demand shifts, a core concern of the project. We generalize a search, matching, and bargaining model to allow individuals to acquire productivity‐enhancing schooling prior to labor market entry. In general, search frictions and weakness in bargaining position contribute to underinvestment in schooling from an efficiency perspective. Using estimates of a general equilibrium version of the model in which firm vacancy creation decisions are included, we find that minimum wages and schooling subsidies improve aggregate welfare, but have very different welfare impacts across the ability distribution. In particular, policies that maximize the average welfare of workers have strongly negative effects on the welfare of the least able.	Christopher J. Flinn, Joseph Mullins
8	2021	The macroeconomics of automation: Data, theory, and policy analysis ↗ This paper directly addresses skilled labor supply adjustment and training responses to technology-driven labor market shifts, examining how retraining programs help workers adapt to automation-induced occupational change. It provides empirically grounded general equilibrium analysis of labor market adjustment mechanisms that are central to understanding whether and how quickly labor supply can respond to technological disruption. The decline in middle-wage occupations and rise in automation over the last decades are at the center of policy discussions. We develop an empirically relevant general equilibrium model that features endogenous labor force participation, occupational choice, and automation capital. We use the model to consider two types of policies: the retraining of workers who were adversely affected by automation, and redistribution policies that transfer resources to these workers. Our framework emphasizes general equilibrium effects such as displacement effects of retraining programs, complementarities between the factors of production, and the effects of distortionary taxation that is required to fund...	Nir Jaimovich, Itay Saporta‐Eksten, Henry Siu, et al.
8	2017	Can Financial Aid Help to Address the Growing Need for STEM Education? The Effects of Need‐Based Grants on the Completion of Science, Technology, Engineering, and Math Courses and Degrees ↗ This paper directly addresses skilled labor supply constraints in STEM fields by examining how financial aid affects human capital formation in high-demand technical areas, a key mechanism through which education systems can affect the pace of labor supply adaptation to technology-driven demand shifts. The findings on how training costs (financial barriers) shape completion decisions in specialized fields are highly relevant to understanding what constrains the flexibility of skilled labor supply during periods of rapid technological change. Abstract Although workers in science, technology, engineering, and math (STEM) fields earn above‐average wages, the number of college graduates prepared for STEM jobs lags behind employer demand. A key question is how to recruit and retain college students in STEM majors. We offer new evidence on the role of financial aid in supporting STEM attainment. Exploiting a regression discontinuity that allows for causal inference, we find that eligibility for need‐based financial aid increased STEM credit completion by 20 to 35 percent among academically‐ready students in a large, public higher education system. These results appear to be driven by shifting students into STEM‐heavy course loads...	Benjamin Castleman, Bridget Terry Long, Zachary Mabel
8	2020	Community College Program Choices in the Wake of Local Job Losses ↗ This paper directly examines how labor market shocks influence human capital formation decisions at community colleges, showing that students respond to local employment declines by reallocating across vocational programs. It provides empirical evidence on the responsiveness of skilled labor supply to demand shifts and the role of education systems in facilitating (or constraining) labor market adjustment, which are core concerns of the project. Deciding which field to study is one of the most consequential decisions college students make, but most research on the topic focuses on students attending four-year colleges. To understand how students attending community colleges make field of study decisions, the author links administrative educational records of recent high school graduates with local mass layoff and plant closing announcements. He finds that declines in local employment deter students from entering closely related community college programs and instead induce them to enroll in other vocationally-oriented programs. He further documents that students predominantly shift enrollment between programs that lead to...	Riley Acton
8	2000	Precautionary Demand for Education, Inequality, and Technological Progress ↗ [Title only] This title directly addresses the intersection of education investment and technological change, suggesting a mechanism where uncertainty drives human capital formation. It aligns well with the project's focus on how education systems adapt to technological progress and its broader implications for inequality and labor supply flexibility. No abstract available.	Eric D. Gould, Omer Moav, Bruce A. Weinberg
8	2013	Skill Bias Magnified: Intersectoral Linkages and White-Collar Labor Demand in U.S. Manufacturing ↗ This paper directly addresses how technological change (product innovation, R&D, IT capital) drives skilled labor demand and how these effects propagate through input-output linkages, examining the mechanisms behind skill-biased technical change. It provides empirical analysis of skill upgrading drivers over time, which is highly relevant to understanding how technology-driven shifts in labor demand reshape labor market composition and the pace of skill supply adjustment across sectors. This paper presents a novel stylized fact and analyzes its contribution to the skill bias of technical change in U.S. manufacturing. The share of skilled labor embedded in intermediate inputs correlates strongly with the skill share employed in final production. This finding points towards an intersectoral technology-skill complementarity (ITSC). Together with input-output linkages, the observed complementarity delivers a multiplier that reinforces skill demand along the production chain. Reduced-form estimates suggest that the effect is quantitatively important, explaining about as much skill upgrading as outsourcing. Empirical evidence suggests that one channel through which this...	Nico Voigtländer
8	2003	Exploring the change in skill structure of labour demand in Norwegian manufacturing This paper directly examines skilled-biased technical change and shifts in labor demand toward skilled workers, core mechanisms in understanding how technology drives skill demand. It provides empirical evidence on the factors explaining changes in skill structure, which is central to understanding how talent supply must adapt to technological opportunities in the project's framework. In most OECD-countries, labour demand has shifted from unskilled to skilled over time.\nMany analyses of this phenomenon focus either on technical change, capital-skill\ncomplementarity or mutual labour substitution. Applying a more general approach enables\nus to explore the relative importance of different factors behind the shift in labour demand\nin Norwegian manufacturing. A multivariate error-correction model of the cost-shares of\nskilled and unskilled labour, materials and energy is estimated. The results show that\nskilled-biased technical change, primarily due to a positive effect on skilled labour and less\ndue to a negative effect on unskilled labour, explains much of the shift...	Kjersti-Gro Lindquist, Terje Skjerpen
8	2024	Tracking Firm Use of AI in Real Time: A Snapshot from the Business Trends and Outlook Survey ↗ This paper directly addresses how firms are adopting AI and the organizational responses required, including staff training and workflow development, which relates closely to the project's focus on how technological change drives labor market adjustment and the need for human capital formation. The finding that AI adoption requires significant training and organizational changes provides empirical evidence relevant to understanding talent supply constraints and the timing of labor market adaptation to technological shifts. Timely and accurate measurement of AI use by firms is both challenging and crucial for understanding the impacts of AI on the U.S. economy.We provide new, real-time estimates of current and expected future use of AI for business purposes based on the Business Trends and Outlook Survey for September 2023 to February 2024.During this period, bi-weekly estimates of AI use rate rose from 3.7% to 5.4%, with an expected rate of about 6.6% by early Fall 2024.The fraction of workers at businesses that use AI is higher, especially for large businesses and in the Information sector.AI use is higher in large firms but the relationship between AI use and firm size is non-monotonic.In contrast, AI use...	Kathryn R. Bonney, Cory Breaux, Cathy Buffington, et al.
8	2017	Horizontal and Vertical Polarization: Task-Specific Technological Change in a Multi-Sector Economy ↗ This paper directly addresses how technological change differentially affects skilled and unskilled labor across occupations and sectors, examining the relationship between task-specific innovation and labor market adjustment. The framework integrates skill distribution, occupational sorting, and sectoral structure, providing insights into how technology shapes demand for different types of human capital and drives structural transformation in labor markets. We analyze the effect of technological change in a novel framework that integrates an economy's skill distribution with its occupational and industrial structure. Individuals become managers or workers based on their managerial vs. worker skills, and workers further sort into a continuum of tasks (occupations) ranked by skill content. Our theory dictates that faster technological progress for middle-skill tasks not only raises the employment shares and relative wages of lower-and higher-skill occupations among workers (horizontal polarization), but also raises those of managers over workers as a whole (vertical polarization). Both dimensions of polarization are faster within sectors that...	Sangyoon Lee, Yongseok Shin
8	2002	Will Transition Countries Benefit or Lose from the Brain Drain This paper directly addresses how emigration prospects and labor market integration affect human capital formation and education investment decisions in transition economies, which is central to understanding how external incentives shape skilled labor supply. The analysis of how expected returns to education stimulate or dampen education decisions and how this interacts with brain drain provides crucial insights into the mechanisms linking labor market opportunities to human capital formation—a core theme of the project. We analyze the theoretical effects on growth and welfare in transition economies of emigration of educated and uneducated labor, of higher emigration probability, etc. Using a Grossman-Helpman growth model, we show that the prospects of labor market integration with the EU raises the expected returns to education, stimulate human capital formation and thus raise the growth rate in the candidate countries. However, given this expected returns, emigration of educated workers tends to lower growth and welfare of those remaining. Thus, while the brain drain reduces welfare, the effects of labor market integration could nevertheless be positive. Emigration of low skilled workers also reduces...	Per Lundborg, Calin Rechea
8	2022	Labor Market Fluidity and Human Capital Accumulation ↗ This paper directly addresses the project's focus on labor market flexibility and human capital accumulation by empirically linking job-to-job mobility to skill acquisition and productivity. It provides critical evidence on how labor market fluidity influences the speed at which workers adapt to new opportunities, a key mechanism underlying the constraints on skilled labor supply discussed in the research. Using panel data from 23 OECD countries, I document that wages grow more over the life-cycle in countries where job-to-job mobility is more common. A life-cycle theory of job shopping and accumulation of skills on the job highlights that a more fluid labor market allows workers to faster relocate to jobs where they can better use their skills, incentivizing accumulation of skills. Lower labor market fluidity reduces life-cycle wage growth by 20 percent and aggregate labor productivity by nine percent across the OECD relative to the US. I derive a set of testable predictions for training and confront them with comparable cross-country training data, finding support for the theory.	Niklas Engbom
8	2011	Occupational mobility within and between skill clusters: an empirical analysis based on the skill-weights approach ↗ [Title only] This paper directly addresses the core theme of transition costs and occupational mobility between different skill clusters, which is central to understanding how skilled labor supply adjusts to technological shifts. The empirical focus on mobility within and between clusters provides relevant evidence for modeling the frictions that constrain the rapid adaptation of human capital to new technology waves. No abstract available.	Regula Geel, Uschi Backes‐Gellner
8	2025	The Diffusion of New Technologies ↗ This paper directly addresses how labor demand for new technologies spreads geographically and across skill levels over time, demonstrating that skilled labor supply constraints may limit where advanced positions can be filled and that skill requirements decline as technologies mature. The finding that high-skill job dispersion lags significantly behind overall diffusion is highly relevant to understanding how education and training systems constrain the pace of labor market adjustment to technological change. Abstract We identify phrases associated with novel technologies using textual analysis of patents, job postings, and earnings calls, enabling us to identify four stylized facts on the diffusion of jobs relating to new technologies. First, the development of economically impactful new technologies is geographically highly concentrated, more so even than overall patenting: 56% of the most economically impactful technologies come from just two U.S. locations, Silicon Valley and the Northeast Corridor. Second, as the technologies mature and the number of related jobs grows, hiring spreads geographically. This process is very slow, taking around 50 years to disperse fully. Third, while initial...	Aakash Kalyani, Nicholas Bloom, Marcela Carvalho, et al.
8	2002	Low Returns in R&D Due to Lack of Entrepreneurial Skills This paper directly addresses R&D allocation and endogenous growth with skilled labor constraints, examining how the supply of entrepreneurial talent affects innovation returns and growth. It's highly relevant to the project's focus on how labor supply constraints (here, entrepreneurial skills) limit innovation capacity and how resource allocation between different skilled occupations shapes technological progress. This Paper proposes a model of endogenous growth where innovating requires both researchers, who produce inventions, and entrepreneurs who implement them. As research and entrepreneurship compete in the allocation of aggregate resources, the relation between growth and research effort is hump-shaped. When entrepreneurs appropriate too little rents from innovation, too few resources are allocated to entrepreneurship and returns to R&D are low because of this lack of entrepreneurial skills. When so, innovation should be promoted by encouraging entrepreneurship rather than research.	Claudio Michelacci
8	1998	Preemptive Search and R&D Clustering ↗ This paper directly addresses the equilibrium direction of R&D and innovation clustering, which is central to understanding how firms allocate research efforts across different technological opportunities. The analysis of how multiple firms compete in the direction of innovation relates directly to the project's focus on directed technical change and how innovation incentives shape the development of specialized labor demand across sectors. While many preceding studies discuss the equilibrium intensity of R&D, this article focuses on its equilibrium direction. There can be a pure-strategy equilibrium in which multiple firms "cluster," i.e., attempt to develop the same technology even if (i) potential technologies are ex ante equally promising, (ii) each technology can be patented by no more than one firm, and (iii) there are no informational spillovers among firms. Economic applications of this clustering result are not confined to R&D. Any situation where agents are racing in search of exclusive economic opportunities can be an example of this model.	James H. Cardon, Dan Sasaki
8	2018	UP IN STEM, DOWN IN BUSINESS: CHANGING COLLEGE MAJOR DECISIONS WITH THE GREAT RECESSION ↗ This paper directly examines how external economic shocks influence college major decisions, particularly the reallocation of talent toward STEM fields during recession, which speaks to how labor supply responds to shifts in skill demand and career incentives. The heterogeneous effects by demographic groups and focus on the timing and magnitude of shifts in human capital formation align closely with understanding how education systems adapt to changing labor market conditions. We use the American Community Survey (ACS) to investigate the extent to which college major decisions were affected during and after the Great Recession with special attention to business and science, technology, engineering, and mathematics (STEM) fields, as well as the heterogeneity across demographic groups. Several conclusions are reached. First, the Great Recession increased the frequency of STEM majors but decreased the frequency of business majors. Second, the increase for STEM fields spreads across several detailed STEM majors, while the decrease in business majors is especially concentrated among finance and management. Third, we find strong heterogeneous effects of the Great...	Shimeng Liu, Weizeng Sun, John V. Winters
8	2023	Different degrees of skill obsolescence across hard and soft skills and the role of lifelong learning for labor market outcomes ↗ This paper directly addresses how training and lifelong learning systems affect labor market adjustment and skill obsolescence across different occupational types, examining the mechanisms through which education mitigates depreciation of specialized human capital. It provides empirical evidence on how training costs and skill formation systems shape worker flexibility and career outcomes, which is central to understanding talent supply constraints during technological change. Abstract This paper examines the role of lifelong learning in counteracting skill depreciation and obsolescence. We differentiate between occupations with more hard skills versus more soft skills and draw on representative job advertisement data that contain machine‐learning categorized skill requirements and cover the Swiss job market in great detail across occupations (from 1950 to 2019). We examine lifelong learning effects for “harder” versus “softer” occupations, thereby analyzing the role of training in counteracting skill depreciation in occupations that are differently affected by skill depreciation. Our results reveal novel empirical patterns regarding the benefits of lifelong...	Tobias Schultheiss, Uschi Backes‐Gellner
8	2009	Endowments, Output, and the Bias of Directed Innovation ↗ This paper directly examines how factor endowment changes—including skilled and unskilled labor—induce biased technical change across industries, which is central to the project's core theme of directed innovation in response to factor availability. The finding that innovation adjusts to factor scarcity rather than output-mix reallocating suggests that innovation direction is constrained by and responsive to labor supply conditions, relevant to understanding how skill supply affects innovation paths and technology adoption patterns. In this paper, I ask the question: <it>Does the output-mix of countries change in response to changes in factor endowments?</it> If so: <it>How long does it take?</it> Using data on capital, as well as skilled and unskilled labour employed in three-digit International Standard Industrial Classification (ISIC) manufacturing industries for a sample of 27 developing and developed countries over the 1973–1990 period, I find that the output-mix of countries does not change in response to endowment changes, even after 15 years. This answer raises another question: <it>How then do countries absorb changes in factor endowments?</it> The data show that in both the short and long runs, an increase in...	Bernardo S. Blum
8	2009	The Future of Inequality The Other Reason Education Matters So Much [Title only] This paper likely addresses how education influences income distribution, which is closely related to the project's focus on skilled labor supply and the economic value of training. It probably provides context on why human capital formation is critical for adapting to technological shifts, directly supporting the core themes of talent supply constraints and directed technical change. No abstract available.	Claudia Goldin, Lawrence F. Katz	Other
8	1998	What is Driving US and Canadian Wages: Exogenous Technical Change or Endogenous Choice of Technique? This paper proposes a new and unified explanation for the following trends observed over the last 25 years: (1) the increased returns to education, (2) the slow measured growth in TFP in an economy undergoing massive changes in its methods of production, and (3) the poor wage performance, relative to TFP growth, of both young high school and college educated workers. The explanation we propose downplays the role of exogenous skill-biased technological change and instead emphasizes how the endogenous choice of modes of organization, influenced by changes in factor supplies, can generate the above observations. For example, we argue that increased education attainment, through its effect of...	Paul Beaudry, David Green
8	2019	The Labor Market Effects of Legal Restrictions on Worker Mobility ↗ This paper closely relates to the project's focus on inventor mobility and cross-technology switching costs by empirically examining how legal frictions restrict skilled worker movement. It provides crucial context on how barriers to labor supply flexibility can impede the rapid reallocation of talent required during periods of technological change. We analyze how the legal enforceability of Noncompete Agreements (NCAs) affects labor markets. Using newly-constructed panel data, we find that higher NCA enforceability diminishes workers’ earnings and job mobility, with larger effects among workers most likely to sign NCAs. These effects are far-reaching: examining local labor markets that cross state borders reveals that enforceability affects workers’ earnings in different legal jurisdictions. Revisiting a classic model of wage-setting, we find that—in contrast to prior evidence—workers facing high enforceability are unable to leverage tight labor markets to increase their wage. Finally, higher NCA enforceability exacerbates gender and...	Matthew S. Johnson, Kurt Lavetti, Michael Lipsitz
8	2022	Engineering Growth ↗ This paper directly examines how the supply of specialized skilled labor (engineers) shapes technological adoption, structural transformation, and long-run growth—core themes of the project. It provides historical evidence on human capital formation in technical fields and their relationship to innovation and economic development, directly relevant to understanding how talent supply constraints affect technological change. Abstract This paper offers the first systematic historical evidence on the role of a central actor in modern growth theory: the engineer. We construct a database on the share of engineers in the labor force during the Second Industrial Revolution (1870–1914) at the county level for the United States and the state and national levels for the Americas. These measures are robustly correlated with income today after controlling for literacy, other types of higher-order human capital (college graduates, lawyers, physicians, patenting) and demand-side factors, as well as after instrumenting engineering using the 1862 US Land Grant Colleges program. Differences in engineering density in 1880...	William F. Maloney, Felipe Valencia Caicedo
8	2017	How Does Human Capital Matter? Evidence from Venture Capital ↗ This paper directly investigates labor market frictions and their impact on investment and innovation, providing empirical evidence on how constraints in skilled labor mobility affect the allocation of capital and growth. It offers valuable context regarding the mechanisms through which skilled labor supply dynamics influence technological adoption and startup viability, aligning with the project's focus on labor market adjustments during technological change. Abstract We examine the effect of labor mobility on venture capital (VC) investment. Following the staggered adoption of the inevitable disclosure doctrine that restricts labor mobility, VCs are less likely to invest in affected states. This effect is more pronounced when human capital is more important to startups, when VC investment is more uncertain, and when VCs’ monitoring costs are higher. The reduced innovation productivity of employees is a plausible underlying mechanism. To mitigate this adverse effect, VCs stage finance startups more and syndicate more with other VCs. Our paper sheds new light on the real effects of labor market frictions.	Lifeng Gu, Ruidi Huang, Yifei Mao, et al.
8	2001	Technical Change, Wages, and Employment in Semiconductor Manufacturing ↗ This paper directly examines how technological change affects skilled labor demand, employment composition, and wage structures across different skill levels in a technology-intensive industry. It provides empirical evidence on skill-biased technical change and labor market adjustment, which directly informs understanding of how industry-specific technological shifts shape demand for different types of skilled workers and training needs. Using case study data gathered between 1993 and 1996, the authors investigate how automation of information handling and materials handling affected employment distribution, skill acquisition, work activities, and compensation in 23 semiconductor plants in four countries. Information handling automation is skill-biased technical change, which leads to use of relatively more technicians and engineers. In the sample studied, it widened the skill gap across occupations, and coincided with higher initial wages for all employees and shorter career ladders for engineers. Materials handling automation also widened the skill gap, but coincided with employment of relatively more operators and with...	Clair Brown, Ben Campbell
8	2017	Do Higher Wages Reduce Knowledge Worker's Job Mobility? Evidence for Swedish Inventors ↗ This paper directly addresses the project's theme of inventor mobility and the factors influencing skilled worker transitions across firms, a key component of understanding talent supply constraints. By analyzing the non-linear effects of wages on mobility for different inventor types, it provides empirical evidence on the frictions and incentives that shape the labor market response to technological opportunities. Abstract Based on linked employer‐employee panel data on all Swedish inventors, this paper analyses how wages affect inventors’ job mobility. It is commonly assumed that higher wages reduce mobility because they reduce the value of outside opportunities. We argue that higher wages also send performance signals to potential employers, who raise their wage offers in response. By disentangling the effects of higher wages, we show evidence of a utility and an opportunity cost effect, which reduce mobility, and a performance‐signalling effect, which increases mobility. In our data, the effects cancel each other out, with no effects of wages on mobility rates on average. We find, however, that...	Olof Ejermo, Torben Schubert
8	2023	Direction of Innovation in Developing Countries and its Driving Forces ↗ [Title only] This title directly matches the core theme of 'direction of innovation' while focusing on developing countries, which provides crucial context for how education systems and labor constraints might operate differently than in advanced economies. Although it does not explicitly mention skilled labor supply lags, the 'driving forces' likely include human capital formation and institutional factors that determine the pace of technological adaptation and labor market adjustment. No abstract available.	Xiaolan Fu, Liu Shi
8	2002	The Skill Premium, Technological Change and Appropriability ↗ [Title only] The title directly addresses the interaction between technological change and skill demand, which is central to understanding shifts in labor demand for specialized talent. However, it lacks an explicit mention of education or training costs, suggesting a stronger focus on wage dynamics and innovation incentives than on the supply-side frictions and adaptation pace emphasized in the project. No abstract available.	Richard Nahuis, Sjak Smulders
8	2021	Open labor markets and Firms’ substitution between training apprentices and hiring workers ↗ This paper directly addresses the project's core theme by empirically demonstrating how labor supply flexibility influences firm investment in human capital formation and training. It provides relevant evidence on the substitution effects between external skilled labor supply and internal training costs, which is central to understanding how talent supply constraints shape skill availability. In this paper, we study whether Swiss employers substitute between training apprentices and hiring cross-border workers. Because both training apprentices and hiring skilled workers are costly for firms, we hypothesize that (easier) access to cross-border workers will lead some employers to substitute away from training their own workers. We account for potential endogeneity issues by instrumenting a firm’s share of cross-border workers using a firm’s distance to the national border and therefore its possibility to fall back on cross-border workers to satisfy its labor demand. We find that both OLS and 2SLS estimates are negative across a wide range of alternative specifications, suggesting...	Manuel Aepli, Andreas Kühn
8	2013	Technical Change and the Relative Demand for Skilled Labor: The United States in Historical Perspective This paper directly examines how technical change shifts the relative demand for skilled labor over time, including evidence that demand growth outpaced supply for high-skill workers—a core concern for understanding talent supply constraints and labor market adjustment to technological change. The historical analysis of occupational skill composition and the timing of skill demand shifts provides essential empirical context for understanding how labor supply responds (or fails to respond) to technology-driven changes in skill requirements. This paper examines shifts over time in the relative demand for skilled labor in the United States. Although de-skilling in the conventional sense did occur overall in nineteenth century manufacturing, a more nuanced picture is that occupations hollowed out: the share of middle-skill jobs - artisans - declined while those of high-skill - white collar, non-production workers - and low-skill - operatives and laborers increased. De-skilling did not occur in the aggregate economy; rather, the aggregate shares of low skill jobs decreased, middle skill jobs remained steady, and high skill jobs expanded from 1850 to the early twentieth century. The pattern of monotonic skill upgrading continued...	Lawrence F. Katz, Robert A. Margo
8	2007	A Quantitative Analysis of the Evolution of the U.S. Wage Distribution: 1970-2000 ↗ This paper directly examines how skill-biased technical change affects human capital accumulation decisions and wage inequality, with particular attention to how individuals respond to shifts in the returns to education over time. The analysis of differential ability to accumulate human capital and the lag between technological change and educational adjustment is central to understanding skilled labor supply constraints during periods of rapid technological change. In this paper, we construct a parsimonious overlapping-generations model of human capital accumulation and study its quantitative implications for the evolution of the U.S. wage distribution from 1970 to 2000. A key feature of the model is that individuals differ in their ability to accumulate human capital, which is the main source of wage inequality in this model. We examine the response of this model to skill-biased technical change (SBTC), which is modeled as an increase in the trend growth rate of the price of human capital starting in the early 1970s. The model displays behavior that is consistent with several important trends observed in the US data, including the rise in overall...	Fatih Guvenen, Burhanettin Kuruşçu
8	2024	From Automation to Augmentation: Redefining Engineering Design and Manufacturing in the Age of NextGen-AI ↗ This paper directly addresses how AI technologies (Gen-AI/NextGen-AI) can augment skilled labor in engineering and manufacturing, with explicit focus on empowering workers to perform more-expert tasks and the critical need for skills-complementary deployments rather than displacement. It examines barriers to AI adoption including workforce skill mismatches, labor market volatility, and the importance of training and worker integration in technology implementation, which aligns closely with the project's core themes of skilled labor supply constraints and technology adoption dynamics. In the mid-2010s, as computing and other digital technologies matured (), researchers began to speculate about a new era of innovationâwith artificial intelligence (AI) as the standard-bearer of a âFourth Industrial Revolutionâ (). The release of generative AI (Gen-AI) technologies (e.g., ChatGPT) in late 2022 reignited the discussion, prompting us to wonder: what are the barriers, risks, and potential rewards to using gen-AI for design and manufacturing? As Gen-AI has entered the mainstream, geopolitics and business practices have shifted. Covid-19 disrupted global supply chains, tensions with import partners have risen, and military conflicts introduce new uncertainties. As...	Md Ferdous Alam, Austin Lentsch, Nomi Yu, et al.
8	2015	The Costs of Occupational Mobility: An Aggregate Analysis ↗ This paper directly addresses the project's core theme of labor supply flexibility by quantifying the costs associated with occupational mobility, which represent the frictions preventing instant labor adjustment. It provides crucial empirical evidence on the composition of these costs, distinguishing between task-specific and occupation-specific factors, thereby informing how quickly specialized labor can respond to technological shifts. We estimate the costs of occupational mobility and quantify the relative importance of task content as a component of total mobility costs. We use a novel approach based on a model of occupational choice which delivers a gravity equation linking worker flows to occupation characteristics and transition costs. Using data from the Current Population Survey and the Dictionary of Occupational Titles we find that task-specific costs account for no more than 15% of the total transition cost across most occupation pairs. Transition costs vary widely across occupations and, while increasing with the dissimilarity in the mix of tasks performed, are mostly accounted for by task-independent...	Guido Matías Cortés, Giovanni Gallipoli
8	2002	Two Phases of Labor Market Transition In Hungary: Inter-Sectoral Reallocation and Skill-Biased Technological Change ↗ This paper directly addresses the interplay between technology-driven demand shifts and the inelastic short-run supply of skilled labor, a core tension in the project. It provides empirical evidence on how training systems and enrollment rates respond to wage signals, offering relevant context on the pace of labor market adaptation. Hungary has been a front-runner in the transition to capitalism. It has also experienced exceptionally radical changes in employment and relative wages. One main feature of these changes is an enormous increase in the returns to skill. This paper argues that it is instructive to divide the process into two periods, divided by around the year 1995. The first period experienced major destruction of low-skilled jobs and large inter-sectoral reallocation, partly toward skill-intensive industries. Employment started to rebound in the second period, which has also seen a pervasive skill upgrade in all sectors. The skill premium in earnings started to grow even faster in the second stage because...	Gábor Kézdi
8	2016	Skilled Labor Supply and Corporate Investment: Evidence from the H-1B Visa Program ↗ This paper closely relates to the project by empirically demonstrating how constraints on skilled labor supply directly influence corporate investment timing and allocation. It provides relevant evidence on labor market frictions and the costs associated with adjusting specialized labor, which are key mechanisms in understanding how talent supply lags constrain economic adaptation. We study how periodic uncertainty about skilled labor supply affects corporate investment using the H-1B visa program for skilled workers as an empirical setting. Exploiting cross-regional variation in H-1B labor flows based on historical immigrant enclaves, we find that firms in regions that attract more H-1B workers concentrate their investments in the quarter after uncertainty about visa access is resolved by the H-1B lottery. Consistent with a skilled labor uncertainty channel, we find that the investment spikes are confined to industries where invested capital cannot be easily redeployed, to firms that cannot easily find domestic substitutes for lost H-1B workers, and to firms that...	Sheng-Jun Xu
8	2018	Strategic human capital management in the context of cross‐industry and within‐industry mobility frictions ↗ This paper directly addresses the project's core themes by empirically modeling how mobility frictions and skill transferability constraints influence firms' decisions on internal training versus external hiring. It provides crucial insights into the transition costs and time required for workers to adapt, as well as the resulting impacts on wage structures and human capital formation during periods of labor market adjustment. Research Summary : We develop and test a theory examining how frictions that restrict mobility across industries and frictions constraining mobility within an industry can co‐occur to effectively isolate individual human capital, ultimately changing the firm's make‐versus‐buy decision for human capital. Empirically, we demonstrate that when cross‐industry frictions in the form of limited skill transferability and within‐industry frictions in the form of noncompete enforceability are both present, employees exhibit longer tenures, firms hire workers with less initial experience, firms change the amount and nature of training provided, and wages marginally increase. These findings suggest...	Evan Starr, Martin Ganco, Benjamin A. Campbell
8	2020	Occupational Inequality in Wage Returns to Employer Demand for Types of Information and Communications Technology (ICT) Skills: 1991–2017 ↗ The paper directly addresses the project's interest in entry cohort wage premiums and the timing of specialization within technology waves by analyzing wage returns to novel versus core ICT skills. It provides empirical evidence on how exposure to specific technology waves generates inequality, which informs the mechanisms of directed technical change and skilled labor supply adaptation. Is employer demand for particular types of ICT skills needed for job performance associated with a wage premium? The claim is that a wage premium is contingent upon whether an ICT skill is a core component of the occupational skill set or a newly introduced (i.e., novel) skill element, thus engendering occupational inequality in wage returns. The study proposes a sophisticated conceptualization and extraction of types of ICT skills. It is the first one to measure employer demand for these skills directly, repeatedly (i.e., annually) and from a long-term perspective. Analyses are based on data from job advertisements taken from the Swiss Job Market Monitor (SJMM), a longitudinal dataset from...	Marlis Buchmann, Helen Buchs, Ann-Sophie Gnehm
8	2015	Business Dynamics of Innovating Firms: Linking U.S. Patents with Administrative Data on Workers and Firms ↗ [Title only] This paper directly addresses the intersection of technological innovation and labor markets by linking patent data with administrative worker records, which is essential for empirically studying how talent supply constraints impact innovating firms. It provides the necessary micro-level evidence to evaluate how quickly skilled labor adjusts to technology-driven demand shifts, a core theme of the researcher's project. No abstract available.	Stuart J.H. Graham, Cheryl Grim, Alan C. Marco, et al.
8	2017	Economic Retirement Age and Lifelong Learning: A Theoretical Model With Heterogeneous Labor, Biased Technical Change and International Sourcing ↗ This paper directly addresses human capital formation, lifelong learning systems, and how education affects labor supply flexibility in response to biased technical change—core themes of the project. The vintage capital model with endogenous human capital depreciation captures the dynamic tension between training costs and labor supply adjustment that the project emphasizes, particularly regarding how education systems affect the pace of worker adaptation to technological shifts. Abstract The employability of an aging population in a world of continuous and biased technical change is top of the political agenda. Due to endogenous human capital depreciation the effective retirement age is often below statutory retirement age resulting in permanent non-employability of older workers. We analyze this phenomenon in a putty-putty human capital vintage model and focus on education and the speed of human capital depreciation. Introducing a two-stage education system with initial schooling and lifelong learning, not even lifelong learning turns out to be capable of aligning economic and statutory retirement. However, well-designed education programs will keep more workers...	Thomas Gries, Stefan Jungblut, Henning Meyer, et al.
8	2002	Technology and Skill Demand in Mexico ↗ This paper directly examines how technology adoption shapes demand for skilled versus low-skilled labor and demonstrates that human capital investment is crucial for realizing productivity gains from technology, which aligns closely with the project's focus on skilled labor supply dynamics and technology-driven shifts in industry demand. The empirical analysis of the temporal relationship between technology adoption and wage/employment changes provides concrete evidence of labor market adjustment frictions that the project seeks to understand. The author investigates the effects of \n technology on the employment and wages of differently \n skilled Mexican manufacturing workers using firm panel data \n from 1992-99. She analyzes the relationship between \n technology and skill demand. Findings support the \n skill-biased technical change hypothesis. She then examines \n the temporal relationship of technology adoption to firm \n productivity and worker wages. The author finds that skilled \n labor increases after technology adoption. And wages of both \n skilled and semi-skilled workers exhibit markedly increased \n growth rates compared with the growth rate of low-skilled \n workers. The results show that investment in human...	Gladys Lopez-Acevedo
8	2010	Recruiting for Ideas: How Firms Exploit the Prior Inventions of New Hires ↗ [Title only] This paper directly addresses the researcher's interest in inventor mobility and the transition costs associated with moving specialized talent between technology waves. By examining how firms leverage prior inventions, it sheds light on the role of specific human capital and the implicit time costs involved in integrating skilled workers into new innovation streams. No abstract available.	Jasjit Singh, Ajay Agrawal
8	2023	How Do Start‐up Acquisitions Affect the Direction of Innovation?* ↗ This paper directly examines how corporate acquisition incentives shape the direction of innovation and R&D allocation between rival and non-rival projects, which is a core theme of the project. While it focuses on start-up acquisitions rather than labor supply, it provides important insights into how innovation incentives are distorted and how firms allocate research efforts across different technological directions—key mechanisms influencing demand for specialized labor skills. A start‐up engages in an investment portfolio problem by choosing how much to invest in a “non‐rival” project and a “rival” project that threatens an incumbent. Anticipating its acquisition, the start‐up distorts its investment portfolio in order to raise acquisition rents. This may improve or worsen the direction of innovation and consumer surplus. The bigger the difference in social surplus appropriability across the two projects, the more likely it is that the direction of innovation improves and consumers benefit from an acquisition. These results also hold if the acquirer takes over the research facilities of the start‐up.	Esmée S. R. Dijk, José L. Moraga‐González, Evgenia Motchenkova
8	2018	The Shelf Life of Incumbent Workers During Accelerating Technological Change: Evidence from a Training Regulation Reform ↗ This paper directly investigates the labor market adjustment mechanisms when the supply of newly trained skilled labor increases, which is central to understanding how education systems shape labor supply flexibility. It provides empirical evidence on how training regulation reforms impact incumbent workers during technological change, offering key insights into the frictions and transition costs associated with skill supply lags. In periods of accelerating technological change, incumbent workers must continuously update their skills to remain productive. In contrast, high school or college graduates recently entering the labor market often have the most up-to-date skills. We investigate how incumbent workers' careers respond to the increasing labor supply of graduates with more technologically advanced IT skills during a period of accelerating technological change. We identify a supply shock of more technologically advanced IT-skilled graduates by exploiting a reform of a German training regulation, a reform mandating all new apprentices in a large manufacturing occupation to acquire in-depth IT skills. We use a...	Simon Janßen, Jens Mohrenweiser
8	2009	Pre-employment vocational education and training in Korea This paper directly examines how vocational education and training systems shape labor market outcomes and the supply of skilled workers, which is central to understanding how education/training costs affect labor supply flexibility. The finding that higher-level VET programs produce better labor market outcomes relates directly to the project's focus on how education systems affect the pace of technological adaptation and skilled labor supply responsiveness. The Korean vocational education and training (VET) system is heralded as one of the key factors contributing to the countries past economic growth. VET has played an important role in developing a skilled labor force during Korea's economic development. However, with the increasing importance of higher education and general education, the status of VET in the country is declining. This paper explores recent Korean data to analyze the labor market outcomes of pre-employment VET institutions. The findings show that current vocational high school education is not associated with better labor market outcomes, in terms of employment rate, wage levels, prospect of permanent employment, and...	Jae-ho Chung, Chang-Kyun Chae
8	2003	Does Poaching Distort Training? ↗ This paper directly addresses the project's core theme by analyzing how labor market frictions and poaching dynamics distort investments in general human capital formation and training. It provides a theoretical framework for understanding the costs associated with skilled labor flexibility and the efficiency of training systems in the presence of turnover. We analyse the efficiency of the labour market outcome in a competitive search equilibrium model with endogenous turnover and endogenous general human capital formation. We show that search frictions do not distort training decisions if firms and their employees are able to coordinate efficiently, for instance, by using long-term contracts. In the absence of efficient coordination devices there is too much turnover and too little investments in general training. Nonetheless, the number of training firms and the amount of training provided are constrained optimal, and training subsidies therefore reduce welfare.	Espen R. Moen, Åsa Rosén
8	2024	Dynamics of the Digital Workforce: Assessing the Interplay and Impact of AI, Automation, and Employment Policies ↗ The paper directly addresses the project's core theme of talent supply constraints by empirically identifying significant skills gaps and the need for training interventions amidst AI-driven technological change. Its focus on the adequacy of education and policy in facilitating labor market adjustment provides relevant empirical context for analyzing how human capital formation lags behind demand shifts. The rapid integration of artificial intelligence (AI) and automation within various sectors poses challenges and opportunities for the global workforce. This study investigates the implications of AI and automation on employment patterns, skills requirements, and remote work infrastructures. Employing a quantitative research design, data was collected through a structured questionnaire administered to 482 professionals across the information technology, healthcare, and finance sectors. The analysis was conducted using Partial Least Squares Structural Equation Modeling (PLS-SEM) to test hypotheses related to the impact of technological advancements on employment. Major findings indicate a...	Oluwaseun Oladeji Olaniyi, Favour Amarachi Ezeugwa, Chinenye Gbemisola Okatta, et al.
8	2023	Where Have All the "Creative Talents" Gone? Employment Dynamics of US Inventors ↗ This paper directly examines skilled labor allocation (inventors) and how employment decisions affect innovative output, which is central to understanding talent supply constraints and R&D allocation across firms. The findings on wage premiums for inventors at incumbents versus their innovation productivity speak to how labor market frictions and strategic firm behavior shape the direction and pace of technological change. How are inventors allocated in the US economy and does that allocation affect innovative capacity? To answer these questions, we first build a model where an inventor with a new idea has the possibility to work for an entrant or incumbent firm. Strategic considerations encourage the incumbent to hire the inventor, offering higher wages, and then not implement her idea. We then combine data on 760 thousand U.S. inventors with the LEHD data. We find that when an inventor is hired by an incumbent, their earnings increases by 12.6 percent and their innovative output declines by 6 to 11 percent.	Ufuk Akcigit, Nathan Goldschlag
8	2023	Skills or Degree? The Rise of Skill-Based Hiring for AI and Green Jobs ↗ This paper directly addresses the project's focus on skilled labor supply constraints during rapid technological change by empirically demonstrating how employers adapt hiring practices to mitigate talent shortages in AI sectors. It highlights the role of flexible training formats and alternative credentialing in expanding the labor pool, providing critical insight into how education systems and market signals interact to alleviate bottlenecks in specialized labor supply. Emerging professions in fields like Artificial Intelligence (AI) and sustainability (green jobs) are experiencing labour shortages as industry demand outpaces labour supply. In this context, our study aims to understand whether employers have begun focusing more on individual skills rather than formal qualifications in their recruitment processes. We analysed a large time-series dataset of approximately eleven million online job vacancies in the UK from 2018 to mid-2024, drawing on diverse literature on technological change and labour market signalling. Our findings provide evidence that employers have initiated"skill-based hiring"for AI roles, adopting more flexible hiring practices to...	Eugenia González Ehlinger, Fabian Stephany
8	2020	Inventor mobility and productivity: a long-run perspective ↗ This paper directly addresses the project's focus on inventor mobility and transition costs by quantifying the impact of firm and geographical moves on inventor productivity. It provides critical empirical evidence on the long-run adjustment period following mobility, which helps contextualize the time lags in labor supply responses to technological shifts. The aim of this paper is to explore the influence of mobility on inventor productivity. Unlike most previous literature in this field, we separate the impact of firm mobility from geographical mobility. Our paper is also novel because of the long period of investigation. We report how the different forms of mobility, and their impacts, have changed over the period 1836–1975 using US patent data. Mobility is identified for serial inventors who change assignee and/or location over time. Firm mobility and geographical mobility increase throughout the period examined, with only temporary reversals around the Great Depression and Second World War. Comparisons across matched samples of mobile and...	Frank van der Wouden, David L. Rigby
8	2019	IT, AI and the Growth of Intangible Capital ↗ This paper closely addresses the project's focus on the time lag in labor market adaptation by quantifying IT intangible capital and its depreciation, which reflects the time required to acquire and adapt firm-specific human capital. It provides crucial empirical context on how skilled labor and organizational adjustments contribute to growth during technology waves, directly informing the analysis of talent supply constraints and transition costs. General purpose technologies like IT and AI typically require complementary investments in firm-specific human and organizational capital to create value for firms. However, good measures of the stock of this IT intangible capital (ITIC) have remained elusive, as has an understanding of how the accumulation of ITIC contributes to economic growth. We use a new extended firm-level panel on IT skills along with Hall’s Quantity Revelation Theorem to assess the nature and growth of ITIC over the last thirty years. We then examine implications for the current wave of AI investment. Our estimates suggest that ITIC accounted for about 25% of firms’ total assets by 2016 and that this capital is...	Prasanna Tambe, Lorin M. Hitt, Daniel Rock, et al.
8	2021	Misallocation of Talent and Innovation: evidence from China ↗ This paper directly examines how talent allocation affects innovation intensity and R&D spending, demonstrating that misallocation of skilled labor between sectors suppresses entrepreneurship and innovation outcomes. The work is highly relevant to understanding how labor supply constraints and allocation frictions impact the direction and pace of innovation, a core theme of the project. This study examined the effects of the misallocation of talent between the government and private enterprise sectors on innovation. By using the 2005 inter-census population survey and patent database, we find a negative correlation between misallocation of talent and innovation intensity. Exploring possible mechanisms, we conclude that this negative correlation between misallocation of talent and innovation was best explained by the negative impact of such misallocation upon entrepreneurship and R&D spending. That is, misallocations of talent reduce the willingness of people to be productive Schumpeterian entrepreneurs, and the majority of companies affected by such misallocation are...	Yian Chen
8	2008	Education, sectoral composition, and growth ↗ The paper directly addresses the interaction between education and technology-driven sectoral shifts, distinguishing between supply-side skill gains and demand-side technical change. It quantifies how schooling contributes to growth through both direct supply effects and indirect technology-induced demand, aligning closely with the project's focus on labor market adaptation and human capital formation. Growth accounting exercises using standard human capital measures are limited in their ability to attribute causal effects and to explain growth. This paper develops a model of growth and schooling consistent with these decompositions but with less unexplained growth. The theory distinguishes between three different sources of education gains: (1) supply shifts, (2) skill-biased technical change increasing demand within industries/occupations, and (3) skill-biased technical change caused by the introduction of new skill-intensive industries/occupations. The third source leads to the large sectoral shifts and the largest growth effects. Quantitatively, schooling contributions account for 24...	Joseph P. Kaboski
8	1998	Does the Sector Bias of Skill-Biased Technical Change Explain Changing Wage Inequality? This paper directly examines skill-biased technical change and its effects on skilled labor demand and wage inequality across sectors, which is central to understanding how technological shifts drive demand for specialized labor. The analysis of sector-specific SBTC patterns and labor market adjustment mechanisms closely relates to the project's focus on how industry demand shifts constrain talent supply and affect skill premium dynamics during technological transitions. This paper examines whether the sector bias of skill-biased technical change (SBTC) explains changing skill premia within countries in recent decades. First, using a two-factor, two-sector, two-country model we demonstrate that in many cases it is the sector bias of SBTC that determines SBTC’s effect on relative factor prices, not its factor bias. Thus, rising (falling) skill premia are caused by more extensive SBTC in skill-intensive (unskill-intensive) sectors. Second, we test the sector-bias hypothesis using industry data for many countries in recent decades. An initial consistency check strongly supports the hypothesis. Among ten countries we find a strong correlation between changes in...	Jonathan Haskel, Matthew J. Slaughter
8	2017	Machines and Machinists: Importing Skill-Biased Technology This paper directly examines how technology adoption (imported machines) affects skilled labor demand and wage premiums for workers with specific skills, demonstrating that technology choice is endogenous to firm and worker characteristics. The empirical analysis of skill-biased technical change propagation through technology adoption is highly relevant to understanding how innovation direction shapes labor market outcomes and skill demand dynamics. We build a model of technology choice with heterogeneous firms and workers to study how imported technology affects wages. Imported machines increase the productivity of worker-firm matches, but are more expensive than domestic ones. More productive firms and more skilled workers are hence more likely to use an imported machine. We study trade liberalization in the model, which makes imported machines cheaper. Both the direct and the equilibrium implications of trade liberalization increase the returns to skill. We use linked employer-employee data on Hungarian machine operators for 1992-2003 to test the predictions of the model. Machine operators exposed to imported machines earn higher...	Miklós Koren, Márton Csillag
8	2024	How does worker mobility affect business adoption of a new technology? The case of machine learning ↗ This paper directly addresses the project's focus on labor market frictions by examining how worker mobility affects the adoption of a new technology (machine learning). It provides empirical evidence on the costs associated with skilled labor retention during technology diffusion, aligning with the research theme of how labor market dynamics constrain or facilitate technological adaptation. Abstract Research Summary We investigate how worker mobility influences the adoption of a new technology using state‐level changes to the enforceability of noncompete agreements as an exogenous shock to worker mobility. Using data on over 153,000 establishments from 2010 and 2018, we find that changes that facilitate worker movements are associated with a significant decline in the likelihood of adoption of machine learning. Moreover, we find that the magnitude of decline depends upon the size of the establishment, the extent of predictive analytics adoption in its industry, and the number of large establishments in the same industry‐location. These results are consistent with the view that...	Ruyu Chen, Natarajan Balasubramanian, Chris Forman
8	2025	Expertise ↗ This paper directly addresses how automation reshapes skill and expertise requirements across occupations, examining how task displacement affects labor demand for workers of different skill levels—a core mechanism linking technological change to skilled labor supply adjustments. It provides empirical evidence on how innovation changes the expertise requirements for remaining tasks, which is central to understanding talent supply constraints and how education systems must adapt to shifting skill demands during technological transitions. Abstract When job tasks are automated, does this augment or diminish the value of labor in the tasks that remain? We argue the answer depends on whether removing tasks raises or reduces the expertise required for remaining non-automated tasks. Since the same task may be relatively expert in one occupation and inexpert in another, automation can simultaneously replace experts in some occupations while augmenting expertise in others. We propose a conceptual model of occupational task bundling that predicts that changing occupational expertise requirements have countervailing wage and employment effects: automation that decreases expertise requirements reduces wages but permits the entry of...	David Autor, Neil Thompson
8	2007	Skill supply and biased technical change ↗ This paper directly addresses the interaction between skill supply dynamics and technological change within an endogenous growth framework, a core theme of the project. It specifically models how incentives for education and training respond to inequality and technical progress, providing a theoretical mechanism for how skilled labor supply may lag or adapt during rapid technological shifts. This article contributes to the debate on skill-biased technical change by studying the dynamics of skill supply and wage inequality in an endogenous growth model with ability-biased technical progress. Due to a discouragement effect, rising within groups inequality reduces incentives to become educated for ordinary-ability workers. This mechanism generates a non-monotonic relationship between the growth rate and skill supply driving wage inequality upward during periods of accelerating technical change. This theoretical explanation is consistent with the apparent ambiguous relationship between the relative skill supply and inequality in the last decades in several OECD countries. © 2007...	Patricia Crifo
8	2023	Technology and Labor Displacement: Evidence from Linking Patents with Worker-Level Data ↗ This paper directly addresses how technological change differentially affects skilled labor demand and worker earnings, examining both labor-saving and labor-augmenting technologies with implications for labor market adjustment and human capital. The study's focus on technology-driven shifts in demand, vintage-specific human capital, and occupational employment dynamics is closely aligned with the project's core interest in how talent supply responds to technology-induced labor market changes and potential constraints on growth during rapid innovation periods. We develop measures of labor-saving and labor-augmenting technology exposure using textual analysis of patents and job tasks.Using US administrative data, we show that both measures negatively predict earnings growth of individual incumbent workers.While labor-saving technologies predict earnings declines and higher likelihood of job loss for all workers, laboraugmenting technologies primarily predict losses for older or highly-paid workers.However, we find positive effects of labor-augmenting technologies on occupation-level employment and wage bills.A model featuring labor-saving and labor-augmenting technologies with vintage-specific human capital quantitatively matches these patterns.We...	Leonid Kogan, Dimitris Papanikolaou, Lawrence Schmidt, et al.
8	2013	Innovation, Reallocation and Growth ↗ [Title only] This title strongly suggests a focus on how technological change reallocates labor across firms or sectors, which is central to understanding the speed of labor market adjustment to new technologies. It likely addresses the frictions in skill reallocation and their impact on growth, aligning well with the project's interest in talent supply constraints and directed technical change. No abstract available.	Daron Acemoğlu, Ufuk Akcigit, Nicholas Bloom, et al.
8	2018	Vocational education, occupational choice and unemployment over the professional career ↗ This paper directly examines how vocational education and occupational choice affect labor market outcomes over careers, showing that mismatches between training and subsequent labor demand create significant unemployment costs. It provides empirical evidence of the friction between skill supply decisions and technology-driven shifts in occupational demand, a core mechanism in the project's framework of how training systems respond to technological change. This study investigates the relationship between occupational choice and unemployment over the professional career with German administrative linked employer–employee data that track more than 800,000 graduates from vocational education over 25 years. Using short-run fluctuations in local and sectoral occupation-specific labor demand as instruments, it finds that choosing an occupation that later turns out to suffer from low or negative employment growth has a statistically and economically significant impact on unemployment over the professional career. On average, an unanticipated one-standard deviation decrease in occupation-specific employment growth raises unemployment by about 116...	Achim Schmillen
8	2022	International College Students' Impact on the Us Skilled Labor Supply ↗ This paper directly quantifies the elasticity of skilled labor supply in response to educational inflows, which is central to the project's focus on how quickly specialized labor can adapt to technological shifts. By identifying specific mechanisms, such as STEM training and policy reforms like OPT, it provides empirical evidence on the constraints and speed of human capital formation relevant to talent supply lags. US universities have attracted hundreds of thousands of international students each year for the last decade. Some of these remain in the US after graduating and contribute to the high skilled labor supply in US labor markets. In this paper, we identify and estimate by how much one more international master’s (or bachelor’s) student increases the skilled labor supply of the US in the short-run. To estimate this "transition rate" we implement an instrumental variable estimation using quasi-random variation in the tuition charged to international students by public US universities in the year that they likely started their studies. We find that attracting an additional international student...	Michel Beine, Giovanni Peri, Morgan Raux
8	2014	The Supply and Demand of Skilled Workers in Cities and the Role of Industry Composition ↗ This paper directly examines skilled labor supply and demand across cities, decomposing how industry composition and technological change drive variation in high-skill worker concentration. While it focuses on spatial equilibrium rather than training costs or education systems, it provides crucial empirical evidence on how demand for skilled labor shifts across sectors and cities—a core mechanism in understanding talent supply constraints during technological transformation. The share of high-skilled workers in U.S. cities is positively correlated with city size, and this correlation strengthened between 1980 and 2010. Furthermore, during the same time period, the U.S. economy experienced a significant structural transformation with regard to industrial composition, most notably in the decline of manufacturing and the rise of highskilled service industries. To decompose and investigate these trends, this paper develops and estimates a spatial equilibrium model with heterogeneous firms and workers that allows for both industry-specific and skill-specific technology changes across cities. The estimates imply that both supply and demand of high-skilled labor have...	Jeffrey Brinkman
8	2021	Modelling Artificial Intelligence in Economics ↗ This paper directly addresses the interaction between AI, a key technology driving shifts in skill demand, and endogenous growth models. It critiques and extends existing frameworks by incorporating 'abilities' alongside skills, which is relevant for analyzing how technological changes impact labor market dynamics and human capital requirements. Economists' two main theoretical approaches to understanding Artificial Intelligence (AI) impacts have been the task-approach to labor markets and endogenous growth theory. Therefore, the recent integration of the task-approach into an endogenous growth model by Acemoglu and Restrepo (AR) is a useful advance. However, it is subject to the shortcoming that it does not explicitly model AI and its technological feasibility. The AR model focuses on tasks and skills but not on abilities, while abilities better characterize AI services' nature. This paper addresses this shortcoming by elaborating the task-approach with AI abilities for use within endogenous growth models. This more...	Thomas Gries, Wim Naudé
8	2012	Public education, technological change and economic prosperity This paper directly integrates public education funding into R&D-based growth theory and examines human capital accumulation dynamics, which is central to understanding how education systems affect the pace of technological adoption and labor supply adjustment. The focus on transitional effects of education reforms versus long-run impacts is highly relevant to the project's core concern about temporal lags in training and skill supply response to technological change. We introduce publicly funded education in R&D-based economic growth theory. The framework allows us to i) incorporate a realistic process of human capital accumulation for industrialized countries, ii) reconcile R&D-based growth theory with the empirical evidence on the relationship between economic prosperity and population growth, iii) revise the policy invariance result of semi-endogenous growth frameworks, and iv) show that the transitional effects of an education reform tend to be qualitatively different from its long-run impact.	Klaus Prettner
8	2022	The Effect of Changes in the Skill Premium on College Degree Attainment and the Choice of Major ↗ This paper directly examines how changes in financial incentives (skill premium variation across fields) shape human capital formation decisions, particularly in STEM fields, which is central to understanding how education systems respond to shifts in labor demand. The study of major choice in response to field-specific returns to education provides empirical evidence on the flexibility and responsiveness of skilled labor supply that the project seeks to understand. We study the impact of financial incentives on higher education decisions and the choice of major. We rely on a reform whereby Israeli kibbutzim shifted from their traditional policy of equal sharing to productivity-based wages, using for identification the staggered implementation of this reform. In this setting of very low initial returns to education, we find that the dramatic increase in the rate of return and its sharp variation across fields of study led to a large increase in the probability of receiving a bachelor’s degree, especially in STEM fields of study that are expected to yield higher financial returns.	Ran Abramitzky, Victor Lavy, Maayan Segev
8	2019	The Effect of Changes in the Skill Premium on College Degree Attainment and the Choice of Major ↗ This paper directly addresses how financial incentives and skill premiums shape human capital formation decisions, specifically the choice to pursue higher education and field of study selection in response to labor market returns. It provides empirical evidence on how workers respond to differential returns across fields, which is central to understanding talent supply constraints and the direction of human capital accumulation during periods of technological change and shifting skill demand. We study the impact of financial incentives on higher education decisions and the choice of major. We rely on a reform whereby Israeli kibbutzim shifted from their traditional policy of equal sharing to productivity-based wages. We use for identification the staggered implementation of this reform in different kibbutzim. In this setting of very low initial returns to education, we find that the dramatic increase in the rate of return and its sharp variation across fields of study led to a large increase in the probability of receiving a Bachelor degree, especially in STEM fields of study that are expected to yield higher financial returns. For men this increase was largely in computer...	Ran Abramitzky, Victor Lavy, Maayan Segev
8	2025	Artificial Intelligence and the Labor Market ↗ The paper directly addresses the project's core theme of how education systems adapt to technology-driven shifts in labor demand, specifically focusing on AI. It highlights the critical lag and inflexibility in training systems, which aligns with the researcher's interest in talent supply constraints and labor market frictions. This study aims to examine the impact of artificial intelligence (AI) on the transformation of the global labor market and to identify the pedagogical challenges in preparing specialists for effective performance in the digital economy. The research employs theoretical analysis, a comparative review of educational programs, and content analysis of national and international policy documents to capture current trends and gaps in workforce preparation. Findings. The results indicate a growing demand for specialists with interdisciplinary thinking, digital literacy, adaptability, and lifelong learning competencies. Yet, existing educational systems often lack sufficient flexibility and...	Menaka Hampole, Dimitris Papanikolaou, Lawrence Schmidt, et al.
8	2013	H-1B Visas and the STEM Shortage: A Research Brief ↗ The paper directly addresses the project's core theme by analyzing the constraints on skilled labor supply, specifically the shortage of STEM workers, and evaluates immigration policy as a mechanism to mitigate talent supply lags. It provides relevant empirical context for understanding how labor market frictions and training gaps constrain growth during periods of technological change. The Senate introduced a landmark comprehensive immigration reform bill last month that has the potential to both increase the number of available H-1B visas for skilled foreigners working in specialty occupations and shift the U.S. employment-based visa system to a more merit-based scheme that favors science, technology, engineering, and mathematics (STEM) workers. As the Congressional process moves forward, debate continues over the role of immigrants in the U.S. labor market. Focusing on demand-side arguments, businesses say they cannot find the skills they need from the domestic labor pool and need access to a global pool of skilled workers. On the other hand, some analysts have argued...	Jonathan Rothwell, Neil G. Ruiz
8	2022	R&D competition and the direction of innovation ↗ This paper directly addresses how R&D competition and innovation incentives shape the direction of technical change, a core theme of the project. The analysis of how payoff structures affect which innovation projects attract talent and effort is highly relevant to understanding how innovation direction influences skilled labor demand and allocation across fields. We propose a model to show that when innovation in a given field becomes more lucrative, its direction can be distorted even though its rate rises. Higher payoffs attract innovators, making the R&D supply side more competitive. This competition endogenously shifts effort toward less promising but quicker-to-invent projects. We empirically quantify the magnitude of this distortion, in the context of pharmaceutical innovation during the Covid-19 pandemic. In the social planner solution, 74 percent more firms would have worked on vaccines and 17 percent more on novel compounds. Policy remedies include advance purchase commitments based on ex-ante value, targeted research subsidies, and...	Kevin A. Bryan, Jorge Lemus, Guillermo Marshall
8	2021	Apprenticeship non-completion in Germany: a money matter? ↗ This paper directly examines how training costs and income incentives affect completion of apprenticeships, a key mechanism for human capital formation and skilled labor supply in Germany. It provides empirical evidence on how financial factors shape the supply of trained workers, which is central to understanding labor market adjustment to skill demand and the effectiveness of education systems in producing specialized talent. Abstract German establishments heavily rely on the apprenticeship system for skill supply. With one in four apprenticeship contracts ending before successful completion, it is in the interest of establishments and policy-makers to determine factors, which reduce non-completion. This paper investigates the role of apprenticeship wages and income prospects after completion for apprenticeship non-completion in Germany. For this purpose, this study identifies incidences of apprenticeship non-completion in a large sample of administrative data on employment biographies and estimates a piecewise exponential model of the non-completion hazard with shared frailties by occupations. The results...	Caroline Neuber-Pohl
8	2021	Technology Transfer and Early Industrial Development: Evidence from the Sino-Soviet Alliance ↗ This paper directly examines how training and human capital formation (know-how transfer) affect long-term technological adoption and productivity, demonstrating that skilled labor training has more durable effects than technology transfer alone. It provides empirical evidence for the project's core concern about how education and training systems influence the pace and sustainability of technology adoption during periods of economic transformation. Abstract This paper studies the long-term effects of technology and know-how transfers on structural transformations. In the 1950s, the Soviet Union supported the construction of the 156 Projects, which were large-scale, capital-intensive industrial clusters in China. These projects included a technology transfer, consisting of state-of-the-art Soviet machinery and equipment, and a know-how transfer, via the training of Chinese engineers, production supervisors, and high-skilled technicians by Soviet experts. We use newly assembled data that follow steel plants for over four decades, and we exploit natural variation in the transfers they eventually received. We find that, while production...	Michela Giorcelli, Bo Li
8	2024	A task-based approach to inequality ↗ This paper directly examines how automation drives direction of technological change and shapes skilled labor demand, demonstrating that technology adoption patterns affect skill premiums and inequality. It addresses the core mechanism of the project—how technology-driven shifts in demand for different labor types occur—and discusses the potential bias in innovation toward automation versus human-complementary tasks, relevant to understanding talent supply constraints and skill demand dynamics. Abstract This article reviews recent work on how automation and task displacement have contributed to labour share declines and inequality in the US labour market. We summarize the basic building blocks of a task-based framework in which a set of tasks is allocated between capital, skilled labour and unskilled labour. Automation, which corresponds to the use of new technologies expanding the set of tasks that can be performed by capital, always reduces the labour share in value added and may depress overall wages and employment. The negative effects of automation on labour share and its potentially adverse consequences for labour demand can be counterbalanced by the creation of new...	Daron Acemoğlu, Pascual Restrepo
8	2018	The Supply of Skill and Endogenous Technical Change: Evidence from a College Expansion Reform ↗ This paper directly addresses the project's core theme by empirically demonstrating how an exogenous increase in skilled labor supply drives endogenous technical change and R&D investment. It provides crucial evidence on the dynamic interaction between human capital formation and technology adoption, highlighting the mechanisms through which talent supply constraints or expansions influence innovation directions. We examine the labor market consequences of an exogenous increase in the supply of skilled labor in several municipalities in Norway, resulting from the construction of new colleges in the 1970s. We find that skilled wages increased as a response, suggesting that along with an increase in the supply there was also an increase in demand for skill. We also show that college openings led to an increase in the productivity of skilled labor and investments in R&D. Our findings are consistent with models of endogenous technical change where an abundance of skilled workers may encourage firms to adopt skill-complementary technologies.	Pedro Manuel Carneiro, Kai Liu, Kjell G. Salvanes
8	2024	Career and Technical Education Alignment Across Five States ↗ This paper directly examines how education and training systems respond to shifts in labor demand, demonstrating that CTE realignment lags local labor market changes by 2-3 years—a core concern of the project regarding speed of skilled labor supply adjustment. The findings on alignment gaps and demographic differences in occupational choice provide empirical evidence on how education systems constrain the pace of labor market adaptation to changing industry needs. We describe alignment between high school career and technical education (CTE) and local labor markets across five states—Massachusetts, Michigan, Montana, Tennessee, and Washington. We find that CTE is partially aligned with local labor markets. A 10-percentage-point higher share of local jobs related to a CTE career cluster is associated with a 3-point higher rate of CTE concentration in that cluster. Women and students from racial or ethnic minority groups are better aligned with local employment than men, in part due to their selection of CTE fields like Education & Training, Health Science, and Hospitality & Tourism, which correspond with a large portion of the workforce in almost...	Celeste K. Carruthers, Shaun M. Dougherty, Thomas Goldring, et al.
8	2021	Do stricter high school math requirements raise college STEM attainment? ↗ This paper directly examines how education system design (high school math requirements) affects the supply of specialized skilled labor in STEM fields, a core mechanism in the project's framework. The finding that curriculum requirements shift students into STEM without changing overall education levels illustrates how training system structure shapes the direction of talent supply, relevant to understanding labor supply constraints during technological change. This paper examines the impact of stricter high school math requirements on the likelihood of completing a degree in STEM fields. Exploiting cross-state variation in the timing of math reforms, I find that stricter math curriculum requirements significantly increased the proportion of the college-educated population earning a STEM degree. Within STEM, the increases in degree completion are concentrated in math and science while there is little discernible impact in technology and engineering. Further analysis suggests that high school graduation, college attendance, and overall degree completion are largely unaffected by the implementation of math reforms. Instead, stricter math curriculum...	Ning Jia
8	2013	Industry Dynamics and Aggregate Stability over Transition This paper directly addresses directed technical change with endogenous R&D allocation across sectors and explicitly models how shocks to skilled labor supply (high-skilled versus low-skilled workers) drive sectoral technological bias and structural transformation. The framework of how labor supply composition influences the direction of innovation and sectoral reallocation is highly relevant to understanding talent supply constraints and innovation incentives during technological transitions. This paper presents an endogenous growth model of directed technical change with vertical and horizontal R&D to study an analytical mechanism that is consistent with the coexistence of aggregate stability and structural change. We focus on changes in the share of the high- versus the low-tech sectors in the context of a slow, but flexible, transitional dynamics that arises from a dynamic system with a three-dimensional stable manifold. Under the hypothesis of a positive shock in the proportion of high-skilled labour, the technological-knowledge bias channel leads to nonbalanced sectoral growth, while the aggregate variables remain approximately constant and thus consistent with the Kaldor...	Pedro Mazeda Gil, Óscar Afonso, Paulo B. Vasconcelos
8	2019	The Hardware–Software Model: A New Conceptual Framework of Production, R&D, and Growth with AI This paper directly addresses directed technical change and the substitutability between hardware (labor) and software (AI) components, which maps onto the project's core concern with how innovation direction shapes skilled labor demand. The framework's treatment of mechanization versus automation and its predictions for factor shares and technical change direction are highly relevant to understanding how technological shifts constrain talent supply and labor market adjustment. The article proposes a new conceptual framework for capturing production, R&D, and economic growth in aggregative models which extend their horizon into the digital era. Two key factors of production are considered: hardware, including physical labor, traditional physical capital and programmable hardware, and software, encompassing human cognitive work, pre-programmed software, and artificial intelligence (AI). Hardware and software are complementary in production whereas their constituent components are mutually substitutable. The framework generalizes, among others, the standard model of production with capital and labor, models with capitalâ€“skill complementarity and skill-biased...	Jakub Growiec
8	2023	Techies and Firm Level Productivity ↗ This paper directly examines how technically trained workers (techies) affect firm productivity and innovation, providing empirical evidence on the relationship between skilled labor supply and technological adoption. It addresses a core mechanism through which education and training investments translate into innovation outcomes, though it focuses on productivity effects rather than labor supply constraints or training system dynamics. We study the impact of techies—engineers and other technically trained workers—on firm-level productivity. We first report new facts on the role of techies in the firm by using French administrative data and unique surveys. Techies are STEM-skill intensive and are associated with innovation, as well as with technology adoption, management, and diffusion within firms. Using structural econometric methods, we estimate the causal effect of techies on firm-level Hicks-neutral productivity in both manufacturing and non-manufacturing industries. We find that techies raise firm-level productivity, and this effect goes beyond the employment of R&D workers, extending to ICT and other techies. In...	James Harrigan, Ariell Reshef, Farid Toubal
8	2004	Skill obsolescence and wage inequality within education groups ↗ This paper directly addresses how education and skill investments affect labor market outcomes in response to technological change, examining the relationship between human capital formation, skill obsolescence, and inequality dynamics. It is highly relevant to the project's focus on how education systems shape labor supply flexibility and adaptation to technological shifts, particularly in demonstrating precautionary demand for education as a response to technological uncertainty. Technological progress renders various skills obsolete, however, the rate of skill obsolescence will vary according to the worker's human capital investments. Workers heavily invested in general skills, such as education, will not suffer high rates of obsolescence, while less-educated workers who invest more in “technology-specific” skills will suffer more when the technology is changed. Consistent with this framework, this chapter demonstrates that increasing randomness is the primary source of inequality growth within uneducated workers, whereas inequality growth within educated workers is determined more by predictable factors. Furthermore, this chapter shows that increasing randomness...	Eric D. Gould, Omer Moav, Bruce A. Weinberg
8	2025	Expertise ↗ This paper directly addresses how automation and task displacement affect labor demand across occupations, with particular focus on how expertise requirements change in response to technological shifts. It is highly relevant to understanding skilled labor supply constraints and occupational adaptation, as it examines the countervailing effects of automation on wage and employment outcomes depending on whether expertise demands rise or fall. When job tasks are automated, does this augment or diminish the value of labor in the tasks that remain?We argue the answer depends on whether removing tasks raises or reduces the expertise required for remaining non-automated tasks.Since the same task may be relatively expert in one occupation and inexpert in another, automation can simultaneously replace experts in some occupations while augmenting expertise in others.We propose a conceptual model of occupational task bundling that predicts that changing occupational expertise requirements have countervailing wage and employment effects: automation that decreases expertise requirements reduces wages but permits the entry of less expert...	David H. Autor, Neil Thompson
8	2023	No Longer Qualified? Changes in the Supply and Demand for Skills within Occupations ↗ The paper directly addresses the friction between rapidly changing skill demands and the slow adaptation of worker qualifications within occupations, which is central to the project's inquiry into talent supply lags. It provides empirical evidence on how education systems and worker skill compositions fail to keep pace with technology-driven shifts, thereby constraining labor market efficiency and growth. Although labor market mismatch often refers to imbalances between supply and demand across occupations, mismatch within occupations can arise when skill requirements change rapidly, with important consequences for workers and the labor market. Using 200 million US online job postings, the authors show educational upskilling varied considerably by occupation during the Great Recession, persisted well beyond the initial recovery, and was correlated with rising demand for software skills. Developing an adjusted mismatch index, they demonstrate how the educational composition of vacancies becomes misaligned with that of unemployed workers within occupations, decreasing aggregate matching...	Alicia Modestino, Mary A. Burke, Shahriar Sadighi, et al.
8	2021	Directed Technical Change in Labor and Environmental Economics ↗ This paper directly addresses the project's core theme of directed technical change by reviewing its theoretical and empirical links between labor and environmental economics. It provides valuable context on how economic incentives shape innovation direction, which is crucial for understanding the interaction between technological shifts and skilled labor supply dynamics. It is increasingly evident that the direction of technological change responds to economic incentives. We review the literature on directed technical change in the context of environmental economics and labor economics, and we show that these fields have much in common both theoretically and empirically. We emphasize the importance of a balanced growth path and show that the lack of such a path is closely related to the slow development of green technologies in environmental economics and to growing inequality in labor economics. We discuss whether the direction of innovation is efficient.	David Hémous, Morten Olsen
8	2012	Offshoring and Directed Technical Change ↗ This paper directly addresses directed technical change and how external shocks (offshoring) endogenously shape the direction of innovation toward skilled or unskilled labor, which is central to understanding how technology-driven shifts in demand influence skill-biased innovation. The model's examination of how market forces determine both technological progress and labor demand across skill types illuminates mechanisms through which labor supply constraints and wage incentives drive innovation direction, relevant to the project's core question of how demand shifts translate into skill-specific technical change. To study the short-run and long-run implications on wage inequality, we introduce directed technical change into a Ricardian model of offshoring. A unique final good is produced by combining a skilled and an unskilled product, each produced from a continuum of intermediates (tasks). Some of these tasks can be transferred from a skill-abundant West to a skill-scarce East. Profit maximization determines both the extent of offshoring and technological progress. Offshoring induces skill-biased technical change because it increases the relative price of skill intensive products and induces technical change favoring unskilled workers because it expands the market size for technologies...	Daron Acemoğlu, Gino Gancia, Fabrizio Zilibotti
8	2007	The Sector Bias of Skill-biased Technical Change and the Rising Skill Premium in Transition Economies This paper directly examines skill-biased technical change and its sectoral variation in explaining skilled labor demand and wage premiums, which directly relates to how technology-driven shifts affect skilled labor markets. The focus on transition economies provides important evidence on how labor market adjustment to innovation pressures occurs across different institutional contexts and countries with varying education systems. In this paper we test the hypothesis that the sector bias of skill-biased technical change is important in explaining the rising relative wage of skilled workers in the manufacturing sector in three Central and Eastern European transition countries. The evidence for Hungary and Poland is consistent with the sector bias being important in explaining the rising wage premium; the hypotheses is however not confirmed for the Czech Republic.	Piero Esposito, Robert Stehrer
8	2003	Shifts and Twists in the relative productivity of skilled labor: Reconciling accelerated SBTC with productivity slowdown Skill-biased technical change is usually interpreted in terms of the efficiency parameters of skilled and unskilled labor. This implies that the relative productivity of skilled workers changes proportionally in all tasks. In contrast, we argue that technical changes also affect the curvature of the distribution of relative productivity. Building on Rosen's (1978) tasks assignment model, this implies that not only the efficiency parameters of skilled and unskilled workers change, but also the elasticity of substitution between skill-types of labor. Using data for the United States between 1963 and 2002, we find significant empirical support for a decrease in the elasticity of substitution...	Arnaud Dupuy, Philip S. Marey
8	2005	THE TALE OF TWO TRAVERSES Innovation and Accumulation in the First Two Centuries of U.S. Economic Growth This paper directly addresses how innovation exhibits directional bias and how technological change affects demand for different types of labor and human capital formation over long historical periods. It explores the non-neutral effects of innovation on skilled labor demand and the historical transition toward investments in education and training as intangible capital, which are core themes in the project's examination of how innovation direction shapes skilled labor supply needs. Both the macroeconomic and the microeconomic evidence from U. S. economy’s experience over the past two centuries leads to a view of technological change (broadly conceived) as having not been “neutral” in its effects upon growth. The specific meaning of “non-neutrality” in this context is that technical and organizational innovation had effects upon the derived demands for factors of production, and these tended to alter the relative prices of the heterogeneous array of productive assets in the economy. By directly and indirectly impinging on relative real rates of remuneration established in the markets for particular types of human labor and skill, and for the services of specific...	Paul A. David
8	2023	Skills or Degree? The Rise of Skill-Based Hiring for AI and Green Jobs ↗ The paper directly addresses the lag in skilled labor supply responding to technology-driven demand, specifically focusing on AI and green jobs as key examples of rapid technological change. It provides empirical evidence that alternative training mechanisms like micro-certificates and apprenticeships can accelerate adaptation, highlighting the role of education systems in mitigating talent supply constraints. Emerging professions in fields like Artificial Intelligence (AI) and sustainability (green jobs) are experiencing labour shortages as industry demand outpaces labour supply. In this context, our study aims to understand whether employers have begun focusing more on individual skills rather than formal qualifications in their recruitment processes. We analysed a large time-series dataset of approximately eleven million online job vacancies in the UK from 2018 to mid-2024, drawing on diverse literature on technological change and labour market signalling. Our findings provide evidence that employers have initiated"skill-based hiring"for AI roles, adopting more flexible hiring practices to...	Eugenia González Ehlinger, Fabian Stephany
8	2011	Value of Invention, Prolific Inventor Productivity and Mobility: Evidence from Five Countries, 1975-2002 ↗ This paper directly addresses the project's theme of inventor mobility and cross-technology switching costs by empirically analyzing the impact of moving between technical fields on inventor productivity. It provides relevant evidence on how talent supply responds to different technological contexts, although it focuses on productivity and value rather than the macroeconomic growth constraints or training time lags specified in the core research questions. The aim of this paper is to provide new insights into (1) the determinants of the value of inventions and (2) the role that mobility plays in the behavior of prolific inventors, whom we identify based on the number of patents exceeding a threshold of productivity. We examine mobility in two dimensions: from firm to firm (inter-firm) and from one technical field to another. We exploit data on patents filed by inventors from five countries (France, uk, Germany, us and Japan) in the USPTO during the period from 1975 to 2002. From our regressions, we show that: (1) as predicted by evolutionary theory, inventor productivity is a positive determinant of invention value, (2) inter-firm mobility is...	William R. Latham, Christian Le Bas, Dmitry Volodin
8	2020	The value and direction of innovation ↗ This paper considers the allocation of innovators between two research lines that differ in their values of innovation and their probabilities of discovery. Innovators choose a research line to maximize their expected utility, and the high value research line may attract more or fewer innovators than the low value research line, depending on the difficulty of discovery. The equilibrium allocation is not efficient, as innovators ignore the effects of their choice of research lines on other innovators.	Kangoh Lee
8	2016	Patentability, R&D direction, and cumulative innovation ↗ This paper directly addresses how institutions (patentability standards) shape the direction of R&D investment and innovation incentives, which is central to the project's focus on directed technical change. While it doesn't explicitly model skilled labor supply or training costs, it examines a key mechanism determining which innovations are pursued, which ultimately drives the composition and timing of skilled labor demand that the project investigates. We present a model where firms conduct R&D in both a safe and a risky direction. As patentability standards rise, an innovation in the risky direction is less likely to receive a patent, which decreases the static incentive for new entrants to conduct risky R&D but can increase their dynamic incentive. These, together with a strategic substitution and a market structure effect, result in an inverted‐U shape in the risky direction but a U shape in the safe direction for the relationship between R&D intensity and patentability standards. R&D is biased toward (against) the risky direction under lower (higher) standards.	Yongmin Chen, Shiyuan Pan, Tianle Zhang
8	2021	To be a STEM or not to be a STEM: Why do countries differ? ↗ This paper directly examines factors influencing STEM field enrollment across countries, including R&D expenditure and education system characteristics, which directly relates to how education systems shape the supply of specialized skilled labor in technology fields. The finding that R&D investment drives STEM enrollment is highly relevant to understanding how labor supply responds to technology-driven demand shifts and the role of economic incentives in human capital formation for specialized fields. Abstract This paper proposes a theoretical analysis and an empirical investigation on simultaneous choices of an enrolment and discipline field, comparing science, technology, engineering, and mathematics (STEM) to non‐STEM fields, to enlighten economic variables influencing students. The cross‐country analysis of 35 countries in the period 2013–2016 tries to disentangle factors shifting students from one choice to another and why countries differ in directing students toward specific disciplines. The results show that expenditures in R&D convince more students to choose STEM disciplines, whereas population density and the expected years of schooling have a negative impact on the percentage...	Bruna Bruno, Marisa Faggini
8	2006	Ben-Porath Meets Skill-Biased Technical Change: A Theoretical Analysis of Rising Inequality ↗ This paper directly addresses how skill-biased technical change affects human capital accumulation and labor supply adjustments, examining the dynamic response of education and training decisions to technological shifts. The model's focus on heterogeneous ability to accumulate human capital and its implications for wage inequality and educational premium evolution is highly relevant to understanding how training systems mediate the economy's adaptation to technology-driven demand shifts. In this paper we present an analytically tractable general equilibrium overlapping-generations model of human capital accumulation, and study its implications for the evolution of the U.S. wage distribution from 1970 to 2000. The key feature of the model, and the only source of heterogeneity, is that individuals differ in their ability to accumulate human capital. Therefore, wage inequality results only from differences in human capital accumulation. We examine the response of this model to skill-biased technical change (SBTC) theoretically. We show that in response to SBTC, the model generates behavior consistent with the U.S. data including (i) a rise in overall wage inequality in both...	Fatih Guvenen, Burhanettin Kuruşçu
8	2006	The Returns to General versus Job-Specific Skills: the Role of Information and Communication Technology This paper directly examines how technological change (ICT adoption) affects returns to different types of human capital and skill formation, showing that technology shifts demand toward general skills while reducing returns to job-specific experience. This directly addresses the project's core question of how technology-driven shifts in industry demand affect skill supply dynamics and the relative value of different types of training/education investments. This paper examines the effect of information and communication technologies (ICT) on the return paid to two different types of skill: general skills, acquired through schooling and work experience, and job-specific skills, acquired by experience in a particular job. Using the UK Labour Force Survey we estimate skill returns in different industries over the period 1994-2001. We evaluate the marginal effect on these returns of the ICT intensity of industry capital and find that the shift towards ICT capital has been associated with a rise in the return to general skills and a reduction in the return to job-specific experience. JEL Classification: J30; J31; O30. Key Words: Skill-biased...	Simon Kirby, Rebecca Riley
8	1999	Skill biased organizational change? Evidence from a panel of British and French establishments This paper directly examines skill-biased organizational change and the complementarity between organizational innovations and worker skills, demonstrating how firms adjust their labor demand in response to organizational restructuring. The findings on differential impacts across skill levels and productivity effects based on skill endowments provide empirical evidence relevant to understanding how labor markets and skill supply respond to workplace transformations, a key mechanism in directed technical change and talent allocation. This paper investigates the determination and consequences of organizational changes (OC) in a panel of British and French establishments. Organizational changes include the decentralization of authority, delayering of managerial functions, and increased multitasking. We argue that OC and skills are complements. We offer support for the hypothesis of "skill-biased" organizational change with three empirical findings. First, organizational changes reduce the demand for unskilled workers in both countries. Second, OC is negatively associated with increases in regional skill price differentials (a measure of the relative supply of skill). Third, OC leads to greater productivity increases in...	Ève Caroli, John Van Reenen
8	2015	Does Labour Mobility Foster Innovation? : Evidence from Sweden This paper directly addresses the project's focus on inventor mobility and talent sorting by empirically demonstrating how knowledge worker movement impacts innovation output. It provides relevant evidence on the mechanisms of skill transfer and labor market adjustment, which are central to understanding how skilled labor supply responds to technological opportunities. By utilising a Swedish unique, matched employer-employee dataset that has been pooled with firm-level patent application data, we provide new evidence that knowledge workers’ mobility has a positive and strongly significant impact on firm innovation output, as measured by firm patent applications. The effect is particularly strong for knowledge workers that have previously worked in a patenting firm (the learning-by-hiring effect), but firms losing a knowledge worker are also shown to benefit (the diaspora effect), albeit more weakly. Finally, the effect is more pronounced when the joining worker originates in another region.	Pontus Braunerhjelm, Ding Ding, Per Thulin
8	2019	The returns to occupation-specific human capital – Evidence from mobility after training. ↗ This paper directly investigates the transferability and returns of occupation-specific human capital, which is central to understanding the time and costs involved in labor supply adjustment. It provides empirical evidence on how specialized training creates frictions for workers moving between occupations, thereby constraining the flexibility of skilled labor in response to shifting demands. Using a longitudinal dataset based on the PISA 2000 survey, we analyze the effect of inter-firm and occupational mobility on post-training wages in Switzerland to assess the transferability of the human capital acquired in training. We show that OLS provides a lower bound estimate of the wage effects of inter-firm and occupational mobility. Inter-firm mobility has no significant wage effect in OLS regressions. However, those who stay in their occupational field earn about 5 percent more than their colleagues who change occupation. We find no evidence for adverse selection when accounting only for apprentices’ level of ability. Accounting for the endogeneity of mobility tends to increase the...	Barbara Müller, Jürg Schweri
8	2023	Schooling, Skill Demand, and Differential Fertility in the Process of Structural Transformation ↗ This paper directly addresses how education investment decisions and human capital formation shape labor supply allocation across sectors during periods of structural transformation, which is central to understanding skilled labor supply dynamics and training cost trade-offs. The examination of quantity-quality fertility decisions and their impact on skill-biased occupational reallocation provides empirical and theoretical insights into how education systems influence the pace and direction of labor market adaptation to technological change. Demography and structural transformation are interrelated, and depend critically on education. At the turn of the twentieth century, US parents began having fewer children while increasing educational investment per child. This quantity-quality tradeoff facilitated job reallocation from the low-skilled agricultural sector to the high-skilled nonagricultural sector. This transformation is examined in a heterogeneous agent model with a nondegenerate human capital distribution, focusing on how fertility and education decisions affect structural transformation. The result shows that the quantity-quality decisions account for up to approximately one-third of the decline in the agricultural...	T. Terry Cheung
8	2019	Technological Transitions with Skill Heterogeneity Across Generations ↗ [Title only] This title directly addresses the project's focus on skill heterogeneity and generational dynamics, which are crucial for understanding how education and training costs influence labor supply flexibility over time. The emphasis on technological transitions suggests an analysis of adjustment lags and the pace at which different cohorts adapt to new technological demands, aligning well with the study of talent supply constraints. No abstract available.	Rodrigo Adão, Martin Beraja, Nitya Pandalai-Nayar
8	2012	The Effect of Labor Market Regulations on Training Behaviour and Quality : the German Labor Market Reform as a Natural Experiment This paper directly examines how labor market institutions and regulations affect firms' training investments and apprenticeship quality, which is central to understanding how education and training systems shape skilled labor supply responsiveness. The analysis of how firms adapt their training strategies to regulatory changes provides empirical evidence on the mechanisms through which labor market flexibility influences human capital formation and the supply of skilled workers. Labor market frictions are seen in many extensions of the classical human capital theory as a prerequisite for firms financing general training. The labor market reforms in Germany at the beginning of the millennium have therefore been seen by many as a danger to the firms’ willingness to support the apprenticeship training system. This paper analyzes the training strategies German firms deployed to cope with the greater labor market flexibility as a result of the labor market reform. Switzerland where no reforms had taken place serves as the counterfactual. The results show that firms successfully reduced the net-costs of training by involving apprentices in more work and reducing...	Anika Jansen, Mirjam Strupler Leiser, Felix Wenzelmann, et al.
8	2007	Innovation, cities, and new work This paper directly addresses how skilled labor supply (college graduates) and local industry structure affect the location and emergence of new work activities following innovation, examining labor market adaptation to technological change. It provides empirical evidence on how human capital endowments influence where new types of skilled labor activities develop, which is central to understanding talent supply constraints and labor market adjustment to innovation. Where does adaptation to innovation take place? The supply of educated workers and local industry structure matter for the subsequent location of new work?that is, new types of labor-market activities that closely follow innovation. Using census 2000 microdata, the author shows that regions with more college graduates and a more diverse industrial base in 1990 are more likely to attract these new activities. Across metropolitan areas, initial college share and industrial diversity account for 50% and 20%, respectively, of the variation in selection into new work unexplained by worker characteristics. He uses a novel measure of innovation output based on new activities identified in...	Jeffrey Lin
8	2006	Understanding Wage Inequality: Ben-Porath Meets Skill-Biased Technical Change This paper directly addresses skilled labor supply and human capital formation in response to skill-biased technical change, modeling how individuals adjust educational investment when demand for skills shifts. It is highly relevant to understanding how training costs and labor supply adaptation respond to technology-driven changes in industry demand, though it focuses on wage inequality outcomes rather than the innovation direction that induces such changes. In this paper we present a tractable general equilibrium overlapping-generations model of human capital accumulation which is consistent with several key features of the evolution of the U.S. wage distribution from 1970 to 2000. The key feature of the model, and the only source of heterogeneity, is that individuals differ in their ability from all kinds of idiosyncratic uncertainty, and thus, wage inequality results only from differences in human capital accumulation. We examine the response of this model to skill-biased technical change (SBTC) both theoretically and quantitatively. First, we theoretically show that in response to SBTC, the model generates behavior consistent with the U.S...	Fatih Guvenen, Burhanettin Kuruşçu
8	2017	The Costs of Occupational Mobility: An Aggregate Analysis ↗ This paper directly quantifies the transition costs for skilled workers moving between occupations, which is a key mechanism for understanding labor supply flexibility during technological shifts. By isolating task-independent versus task-specific costs, it provides critical empirical evidence on the frictions that constrain the pace of adaptation in labor markets. We estimate the costs of occupational mobility and quantify the relative importance of differences in task content as a component of total mobility costs. We use a novel approach based on a model of occupational choice that delivers a gravity equation linking worker flows to occupation characteristics and transition costs. Using data from the Current Population Survey and the Dictionary of Occupational Titles we find that task-specific costs account for no more than 15% of the total transition cost across most occupation pairs. Transition costs vary widely across occupations and, while increasing with the dissimilarity in the mix of tasks performed, are mostly accounted for by...	Guido Matías Cortés, Giovanni Gallipoli
8	2015	Measuring the Specificity of Occupational Training Curricula and Labor Market Flexibility – An Economic Perspective on the Curriculum Development of VET Occupations This paper directly addresses the project's core theme of how education and training systems shape labor supply flexibility by quantifying occupational specificity and transition costs. It provides empirical evidence on how specific skill bundles constrain mobility, offering critical insights into the frictions that delay skilled labor adaptation to new technological demands. In this paper we analyze the training curricula of VET (vocational education and training) occupations using detailed data on learned skills from official trainings regulations. We explore how differences in the skill bundles of occupational curricula can be measured and how such differences affect graduates' long-term labor market outcomes. Based on Lazear’s skill weights approach, we develop novel measures for the skill distance between occupations and the specificity of occupations. We find that workers who change between occupations with very dissimilar skill weights are faced with lower wages after the change compared to workers who change to similar occupations. Additionally, workers...	Christian Eggenberger, Miriam Rinawi, Uschi Backes‐Gellner
8	2019	Over-Skilling, Under-Skilling, and Higher Education ↗ [Title only] This title directly addresses the core theme of labor supply flexibility by highlighting the mismatch between worker skills and job requirements, which is a key friction in adapting to technological change. It likely explores how higher education systems contribute to or mitigate these imbalances, thereby influencing the pace of labor market adjustment during periods of rapid innovation. No abstract available.	Hugo Figueiredo
8	2022	Does Updating Education Curricula Accelerate Technology Adoption in the Workplace? Evidence from Dual Vocational Education and Training Curricula in Switzerland ↗ This paper directly addresses the project's core question by empirically demonstrating how education curriculum updates reduce the lag in skilled labor supply responding to technological shifts. It provides critical evidence on the role of training systems in mitigating talent supply constraints during technology adoption waves, which is central to the researcher's interest in directed technical change and labor market frictions. In an environment of accelerating technological change and increasing digitalization, firms need to adopt new technologies faster than ever before to stay competitive. This paper examines whether updates of education curricula help to bring new technologies faster into firms’ workplaces. We study technology changes and curriculum updates from an early wave of digitalization (i.e., computer-numerically controlled machinery, computer-aided design, and desktop publishing software). We take a text-as-data approach and tap into two novel data sources to measure change in educational content and the use of technology at the workplace: first, vocational education curricula and, second, firms’ job...	Tobias Schultheiss, Uschi Backes‐Gellner
8	2024	Automation, techies, and labor market restructuring ↗ This paper directly addresses how automation shapes labor market skill demand and demonstrates that the supply of specialized technical workers (techies) is a key constraint on occupational upgrading, which is central to understanding how talent supply lags affect adaptation to technological change. The findings that economies with abundant or growing STEM talent experience stronger skill upgrading while others face polarization directly supports the project's core thesis about training costs and labor supply flexibility in response to technology-driven demand shifts. While job polarization was a salient feature in European economies in the decade up to 2010, this phenomenon has all but disappeared, except in a handful of Southern-European economies. The decade following 2010 is characterized by occupational upgrading, where low-paid jobs shrink and high paid jobs expand. We show that this is associated with automation: employment shares in low paid, highly automatable jobs shrinks, while employment shares of better paid jobs that are unlikely to be automated expands. Techies (engineers and technicians with strong STEM skills) help explain cross country variation in occupational upgrading: economies that are abundant in techies or exhibit high growth of...	Ariell Reshef, Farid Toubal
8	2017	To Be or Not to Be a Scientist? ↗ This paper directly addresses skilled labor supply dynamics and occupational mismatch in science fields, examining why trained scientists leave scientific occupations despite employer complaints of shortages. It provides empirical evidence on how wage structures and occupational matching affect the effective supply of specialized labor, which is central to understanding constraints on technology-driven labor demand shifts and talent allocation inefficiencies. Abstract Employers regularly complain of a shortage of qualified scientists and advocate that to remain competitive more scientists need to be trained. However, using a survey of graduates from British universities, I report that 3 years after graduation less than 50% of graduates from science subjects are working in a scientific occupation. Accounting for selection into major and occupation type, I estimate the wages of graduates and report that the wage premium of science graduates only occurs when these graduates are matched to a scientific occupation – and not because science skills are in demand in all occupations. I also provide additional evidence to assess whether science graduates...	Arnaud Chevalier
8	2021	Macrodynamic Modeling of Innovation Equilibria and Traps ↗ This paper directly addresses the strategic complementarity between R&D investment and human capital formation in endogenous growth models, examining how skill supply decisions interact with innovation equilibria. It is highly relevant to the project's core focus on how education/training systems and skilled labor supply shape the direction and pace of technological change, particularly through the mechanism of wage premiums and sectoral allocation of skilled workers. Abstract We study the interplay between the decision of firms to innovate and human capital. Based on a dynamic evolutionary model, we show that in the presence of a high stock of human capital, an advanced economy can remain caught in an “innovation trap”. Following the literature on endogenous growth, R&D investments and human capital are modeled as strategic complements. Skilled workers increase productivity and enjoy a wage premium if they are employed in the R&D sector, while they receive the same wage as unskilled workers if they are employed in the production sector. We model the evolutionary dynamics of the share of innovative firms and human capital to determine the conditions...	Edgar J. Sánchez Carrera, Sebastian Ille, Giuseppe Travaglini
8	2024	The Diffusion of New Technologies ↗ This paper directly addresses how skilled labor supply adjusts to technological innovation, showing that talent concentration in innovation hubs persists for decades and that skill requirements evolve as technologies mature. It provides empirical evidence on the slow geographic and occupational diffusion of skilled jobs following technological breakthroughs, which is central to understanding labor market lags and talent supply constraints during rapid technological change. We identify phrases associated with novel technologies using textual analysis of patents, job postings, and earnings calls, enabling us to identify four stylized facts on the diffusion of jobs relating to new technologies. First, the development of economically impactful new technologies is geographically highly concentrated, more so even than overall patenting: 56% of the most economically impactful technologies come from just two U.S. locations, Silicon Valley and the Northeast Corridor. Second, as the technologies mature and the number of related jobs grows, hiring spreads geographically. But this process is very slow, taking around 50 years to disperse fully. Third, while initial hiring...	Aakash Kalyani, Federal Reserve Bank of St. Louis, Nicholas Bloom, et al.
8	2024	Economic shocks and skill acquisition: Evidence from a national online learning platform at the onset of COVID-19 ↗ This paper directly examines how workers respond to labor market shocks by acquiring new skills through training, demonstrating that skill acquisition decisions depend on expected future labor market conditions and individual characteristics—core mechanisms in the project's framework. The findings on differential skill investment across age groups and the employment outcomes of training provide empirical evidence on how quickly skilled labor supply can adjust to technological and economic shifts. We study how large shocks impact individuals’ skilling decisions using data from a large, government-sponsored, online learning platform in Saudi Arabia. The onset of the COVID-19 pandemic brought about a massive increase in online skilling, and demand shifted towards courses that offered skills, such as telework, likely to be immediately valuable during the pandemic. Consistent with a model where individuals trade off reskilling costs with their expectations of future labor market conditions and their duration of work, we find that shifts into telework courses were largest for older workers. In contrast, younger workers increased enrollments in courses related to new skills, such as...	Ina Ganguli, Jamal Ibrahim Haidar, Asim Khwaja, et al.
8	2025	Good Rents versus Bad Rents: R&D Misallocation and Growth ↗ This paper directly addresses R&D allocation and innovation direction in an endogenous growth framework, examining how research resources should be reallocated across firms with different innovation characteristics. While it focuses on firm-level innovation rather than labor supply constraints, it is highly relevant to understanding how innovation incentives and R&D allocation shape the trajectory of technological change, a core theme of the project. Firm price-cost markups may reflect (a) bigger step sizes from quality innovations that confer significant knowledge spillovers onto other firms, and/or (b) higher process efficiency than competing firms or other factors which bear no obvious knowledge externality.We write down an endogenous growth model with innovation step size and process efficiency as alternative sources of markup heterogeneity.Compared with the laissez-faire equilibrium, the social planner wants to reallocate research towards high step size firms but not high process efficiency firms.We then use price and productivity data across firms in French manufacturing to infer firm step sizes and process efficiency.We find that...	Philippe Aghion, Antonin Bergeaud, Timo Boppart, et al.
8	2024	Steering Labor Mobility Through Innovation ↗ The paper directly addresses inventor mobility and the accumulation of technology-specific human capital, which are core themes of the project regarding talent sorting and transition costs. It provides empirical evidence on how firms shape labor market frictions and human capital specificity, offering relevant mechanisms for understanding skilled labor supply dynamics. This paper argues that firms proactively use innovation decisions to influence the mobility and human capital accumulation of their workers. We develop a dynamic model in which workers conduct R&D projects, accumulating both general and firm-specific human capital. Firms choose the scope of innovation, influencing the type of human capital workers accumulate during the process. Pursuing more general innovation leads to increased knowledge redeployability for the firm at the cost of more difficult employee retention. We estimate the model using granular innovation production and mobility data of three million inventors. Our model closely matches the observed mobility and innovation...	Song Ma, Wenyu Wang, Yufeng Wu
8	2025	Skilled Labor Uncertainty and Corporate Investment: Evidence from H-1B Visa Lottery Cycles ↗ This paper directly examines how uncertainty about skilled labor supply (via H-1B visa constraints) affects firm investment decisions, providing empirical evidence on labor supply constraints and their impact on capital allocation and innovation. It demonstrates that skilled labor supply frictions influence corporate R&D and investment patterns, which is central to understanding how training costs and talent availability shape technological adaptation and growth dynamics. We study how periodic uncertainty about skilled labor supply affects corporate investment using the H-1B visa program for skilled workers as an empirical setting. Exploiting cross-regional variation in H-1B labor flows based on historical immigrant enclaves, we find that firms in regions that attract more H-1B workers concentrate their investments in the quarter after uncertainty about visa access is resolved by the H-1B lottery. Consistent with a skilled labor uncertainty channel, we find that the investment spikes are confined to industries where invested capital cannot be easily redeployed, to firms that cannot easily find domestic substitutes for lost H-1B workers, and to firms that...	Sheng-Jun Xu
8	2018	Frictional Labor Markets, Education Choices and Wage Inequality This paper directly examines how education choices and labor market frictions jointly determine wage inequality and skill supply, with explicit focus on the college wage premium and skill-biased technological change. It models endogenous education decisions and labor market matching in a way that captures how frictions affect the speed and pattern of human capital formation—core mechanisms in understanding whether talent supply can keep pace with technology-driven skill demand shifts. This paper studies how education choices and labor market frictions interact in shaping wage inequality. The wage premium of college graduates relative to high school graduates (between-group inequality) has tripled since 1980 in the U.S., and the variance of log wages conditional on educational attainments (within-group inequality) has become about 50% larger across the board. To understand the source of this change, we construct a model with schooling investments and labor market frictions that generates supply and demand of skills and frictional wage differentials as equilibrium objects. The model features a two-sided sorting: education sorting of skilled workers into college education...	Manuel Macera, Hitoshi Tsujiyama
8	2023	The Elasticity of Substitution between Skilled and Unskilled Labor In Developing Countries: A Directed Technical Change Perspective ↗ This paper is closely related as it applies the directed technical change framework to analyze how changes in skilled labor supply influence wage inequality and growth, directly touching on the interaction between talent supply and technology. While it focuses on elasticity and equilibrium outcomes rather than the temporal friction of training costs, its modeling of endogenous responses to skill supply shifts provides essential theoretical context for the project. IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management. ABSTRACT: We develop a model of endogenous skill-biased technical change in developing countries. The endogenous response to a rise in skill supply counters the traditional substitution effect and dampens its role in reducing wage inequality. The model re-enforces consensus estimates of the elasticity of substitution between more/less educated workers by reconciling dispersed existing estimates. It also...	Alberto Behar
8	2014	Forty Years of Decreasing Wage Inequality in France : The Role of Supply and Hidden Skill-Biased Technical Change This paper directly examines skill-biased technical change and how education supply constraints interact with labor demand shifts, showing that stabilizing educational attainment combined with persistent SBTC will create wage inequality and talent supply pressures. It provides empirical evidence of how training/education supply lags constrain labor market adjustment to technological change, a core concern of the project regarding skilled labor supply responsiveness and education system constraints on adaptation to technology-driven demand shifts. This paper relates changes in the high-skilled / medium-skilled relative wage of full-time male wage-earners in France with changes in supply and skill-biased demand shifts, including skill-biased technical change (SBTC). Using annual employer-employee administrative data matched with Census data from 1967 to 2009, we document a strong decrease in this relative wage concomitantly with a strong increase in the relative supply. Estimating a labor supply and demand model, in which experience groups are imperfect substitutes, we show that the strong increase in educational attainment in France has hidden so far the effects of SBTC. The magnitude of these effects is however between half and 100%...	Pauline Charnoz, Élise Coudin, Mathilde Gaini
8	2024	The Impact of Hiring Costs for Skilled Workers on Apprenticeship Training: A Comparative Study ↗ This paper directly investigates how labor market frictions, specifically hiring costs, influence the supply of skilled labor through apprenticeship training. It provides empirical evidence on how training systems adapt to economic conditions, which is central to understanding the flexibility of skilled labor supply and talent formation during technological shifts. This study analyzes the relationship between firms’ costs of hiring skilled workers and their provision of internal apprenticeship training. Our empirical analysis draws on four waves of firm surveys conducted in Germany and Switzerland that include detailed information on firms’ hiring costs for skilled workers and training practices. Using an indicator of labor market tightness as an instrumental variable, we identify a substantial hiring cost elasticity of apprenticeship contracts of 1.4 for Swiss firms. Although we also find a positive and increasing cost elasticity for German firms over time, its magnitude is considerably smaller. Our results are consistent with the perspective that...	Manuel Aepli, Samuel Muehlemann, Harald Pfeifer, et al.
8	2015	Inter-industry labor reallocation and task distance ↗ This paper directly addresses the project's focus on transition costs and skill specificity by quantifying how 'task distance' creates frictions in inter-industry labor reallocation. Its empirical findings on earnings losses and demographic heterogeneity provide crucial evidence for understanding how human capital formation and technology-driven shifts constrain labor supply flexibility. This paper investigates factors preventing inter-industry labor reallocation by estimating the determinants of inter-industry worker flow and earnings change after a job change. We find that the difference in required tasks is an important reason for earnings reduction after an inter-industry job change, and thus, workers may hesitate to move to industries requiring a different set of tasks for fear of losing the wage premium acquired by task-specific human capital. In addition, more workers switch to industries with which their previous industry had larger transactions, although it affects earnings changes only marginally. On the other hand, industry performance does not affect labor...	Ayako Kondo, Saori Naganuma
8	2021	Hollowing out and slowing growth: The role of process innovations ↗ This paper directly addresses the project's core theme by modeling skill acquisition costs and the time required for lower-skilled workers to adapt to new technologies. It provides a theoretical framework for how technological shifts, specifically process innovations, drive labor market adjustments and growth, aligning with the research focus on skilled labor supply flexibility and technology-driven demand shifts. I develop an endogenous growth model with skill acquisition, which can simultaneously account for labour market polarization and a slow down in labour productivity growth. When a new technology enters the economy, it requires implementation by high-skilled workers. Over time, process innovation makes the technology more user-friendly so that lower skilled workers can also operate it. Process innovation contributes to growth by increasing the range of technologies that a lower skilled worker can operate. It also reallocates labour demand for different skill-groups and thereby affects the income distribution. Skill can be acquired through a costly learning activity and workers face different...	Wenbo Zhu
8	2025	Patentability Requirements and the Direction of Innovation ↗ This paper directly addresses the direction of innovation through the lens of patent policy and firm R&D allocation decisions, showing how patentability regimes influence whether firms cluster in overlapping versus non-overlapping technological areas. While not explicitly about labor supply or training, it is closely related to the core theme of how institutional factors shape the direction of technical change and innovation incentives, which is foundational to understanding how demand for specialized skills emerges. ABSTRACT We model a duopolistic game where firms first choose the direction of their innovation, then invest in the chosen direction, and finally, compete in the product market. Investments occur either in overlapping or non‐overlapping territories. We show that, in the presence of a generous patent regime that allows the protection of innovations of little value, firms tend to invest in overlapping technologies; stricter requirements for patentability may induce firms to operate in different technological areas, thereby increasing market efficiency. We illustrate our general theory using two stylized models of Cournot competition with product and process innovations, respectively.	Fabio M. Manenti, Luca Sandrini
8	2025	Regulating the direction of innovation ↗ This paper directly addresses the direction of innovation and R&D allocation across competing technological paths, which are core themes in the project. While it focuses on regulatory mechanisms rather than labor supply constraints, it provides crucial insights into how innovation direction is shaped—a key determinant of subsequent skilled labor demand and talent supply requirements in the researcher's framework. This paper examines the regulation of technological innovation direction under uncertainty about potential harms. We develop a model with two competing technological paths and analyse various regulatory interventions. The optimal regulatory approach depends critically on the magnitude of potential harm relative to technological benefits. Our analysis reveals a motive to double down on harmful technologies in resource allocation across research paths, challenging common intuitions about diversification. We demonstrate that ex post regulatory instruments, particularly liability regimes, outperform ex ante restrictions in many scenarios. These insights have important implications for...	Joshua S. Gans
8	2025	Automation-Induced Innovation Shift ↗ This paper directly addresses the project's theme of technology-driven shifts in industry demand by documenting how automation induces a directional change in corporate innovation toward AI. It provides empirical evidence on the R&D allocation and innovation incentives involved in this transition, which are central to understanding the dynamics of directed technical change and labor market adaptation. We study how exposure to automation affects the nature and level of corporate innovation, which informs how innovation begets innovation. We document that firms with high robot exposure decline in technology similarity and shift innovative activities towards AI, which automation naturally complements through data accumulation. The shift is more pronounced for firms with greater data generation or prior AI-related research experience. Because AI patents are more costly (e.g., in labor input), firms with high automation experience a significant rise in R&D expenditure but an initial drop in patent quantity, before benefiting---an innovation "J-Curve." Our findings not only resolve the puzzle...	Lin Cong, Yao Lu, Han Shi, et al.
8	2022	Data and Code for: The Human Side of Structural Transformation ↗ This paper directly examines how human capital formation shapes labor supply adjustments across sectors during structural transformation, demonstrating that education and training costs significantly influence the pace and direction of labor reallocation. The work is highly relevant as it empirically validates the project's core premise that labor supply flexibility is constrained by human capital dynamics and shows how training/education systems affect sectoral labor transitions over time. We document that nearly half of the global decline in agricultural employment was driven by new cohorts entering the labor market. A new dataset of policy reforms supports an interpretation of these cohort effects as human capital. Using a model of frictional labor reallocation, we conclude that human capital growth led to a sharp decline in the agricultural labor supply, accounting, at fixed prices, for 40% of the decrease in agricultural employment. This aggregate effect is halved in general equilibrium and it reflects the role of human capital as both a mediating factor and an independent driver of labor reallocation.	Tommaso Porzio, Federico Rossi, Gabriella Santangelo
8	2025	The Labor Market Incidence of New Technologies ↗ This paper directly addresses skilled labor supply flexibility and labor market adjustment to technological change by modeling how workers' ability to transition between occupations depends on skill distance. The framework reveals how training/mobility costs constrain labor supply adaptation to automation and AI, showing that technology-driven demand shifts produce larger wage effects due to limited worker reallocation—a core concern of the project regarding talent supply lag constraints during rapid technological change. This paper develops a new framework to analyze the incidence of labor market shocks, focusing on automation and artificial intelligence. Central to our theory is the distance-dependent elasticity of substitution (DIDES), where worker mobility between occupations declines with their distance in skill space. Mapping 306 occupations into cognitive, manual, and interpersonal skill dimensions, we estimate a low-dimensional latent skill model that preserves granular substitution patterns. We show that both automation and artificial intelligence cluster within skill-adjacent occupations, constraining employment adjustment and amplifying wage effects. The clustering nature of technologies generates...	Tianyu Fan
8	2010	Education, Training, Innovation: Evidence from Transition Economies ↗ This paper directly examines the relationship between education, training, and innovation outcomes in transition economies, providing empirical evidence on how human capital formation affects innovation capacity across different institutional contexts. The focus on transition economies offers valuable comparative evidence on how education and training systems shape innovation patterns during periods of economic restructuring and technological change. Unlike most empirical cross-country analysis of the determinants of innovation, which focus mainly on developed countries, this study analyzes the transition countries of Eastern Europe and the Former Soviet Union.	Alisher Akhmedjonov
8	2024	Explore or Exploit? Labor Market Frictions and the Innovation Choice ↗ This paper directly addresses the project's core theme of how labor market frictions influence the direction of innovation and R&D allocation by firms. It provides a theoretical framework linking labor market conditions to the choice between exploitative and breakthrough innovations, which complements the research focus on skilled labor supply constraints and directed technical change. This paper theoretically examines innovation investment incentives by firms facing labor market frictions. A firm can choose the degree of innovation of its projects: non-innovative (exploitative) investments that continue existing ideas, incrementally innovative investments, or truly novel innovations that involve uncertain technologies. In an optimal contracting setting with moral hazard, learning about unknown managerial talent, and asymmetric information about project quality, there are three main results. First, constrained-efficient contracts generate rents for managers that represent agency costs for firms, and these vary across different project types. Second, managers earn higher...	Richard T. Thakor
8	2007	Essays on Labor Market Frictions, Technological Change and Macroeconomic Fluctuations This dissertation directly addresses labor market frictions and technological change through search-matching models, with particular emphasis on skill-biased technological change, skill mismatch, and endogenous worker education investment—core themes in the project. The second essay's focus on how workers invest in education in response to skill-biased technological change and how skill acquisition costs affect labor market outcomes closely aligns with the project's examination of education costs and training time constraints on skilled labor supply adjustment. The dissertation consists of an introductory chapter and three essays that apply search-matching theory to study the interaction of labor market frictions, technological change and macroeconomic fluctuations. \n\nThe first essay studies the impact of capital-embodied growth on equilibrium unemployment by extending a vintage capital/search model to incorporate vintage human capital. In addition to the capital obsolescence (or creative destruction) effect that tends to raise unemployment, vintage human capital introduces a skill obsolescence effect of faster growth that has the opposite sign. Faster skill obsolescence reduces the value of unemployment, hence wages and leads to more job...	Juuso Vanhala
8	2006	How General is Specific Human Capital? Using Mobility Patterns to Study Skill Transferability in the Labor Market This paper directly examines human capital transferability and skill specificity across occupations, which is central to understanding how quickly workers can retrain and adapt to new technological demands. The findings on task-specific human capital, occupational mobility patterns, and wage effects of skill transferability are highly relevant to modeling labor supply flexibility and training cost constraints during technology-driven shifts in labor demand. Previous studies assume that labor market skills are either fully general or specific to a firm. This paper uses patterns in mobility and wages to the transferability of specific skills across occupations. The empirical analysis combines information on tasks performed in different occupations with a large panel on complete work histories and wages. Our results demonstrate that labor market skills are partially transferable across occupations. We find that individuals move to occupations with similar task requirements, and that the distance of moves declines with time in the labor market. Further, tenure in the last occupation affects current wages, and the effect is stronger if the two...	Uta Schoenberg, Christina Gathmann
8	2017	The IT Boom and Other Unintended Consequences of Chasing the American Dream - Working Paper 460 This paper directly addresses skilled labor supply dynamics and occupational choice in response to technology-driven demand shifts, specifically examining how immigration policy and IT sector growth induced workers to enter computer science occupations in both the US and India. The work models endogenous human capital formation decisions (field of study, occupation switching) alongside innovation and technology diffusion, making it highly relevant to understanding how talent supply constraints and education/training decisions shape adaptation to technological opportunities. With the majority of all H-1B visas going to Indians, we study how US immigration policy coupled with the internet boom affected both the US and Indian economies, and in particular both countries’ IT sectors. The H-1B scheme led to a tech boom in both countries, inducing substantial gains in firm productivity and consumer welfare in both the United States and India. We find that the US-born workers gained $431 million in 2010 as a result of the H-1B scheme. In India, the H-1B program induced Indians to switch to computer science (CS) occupations, increasing the CS workforce and raising overall IT output in India by 5 percent. Indian students enrolled in engineering schools to gain...	Gaurav Khanna, Nicolas Morales
8	2025	Economic Development According to Chandler ↗ This paper directly addresses how education and human capital formation constrain skilled labor supply and firm organization, examining how training and white-collar worker availability shape production structures and economic development. It is closely aligned with the project's focus on skilled labor supply constraints, human capital formation, and how education systems affect economic adaptation and growth, though it emphasizes firm organization rather than technological innovation direction specifically. Chandler (1977) shows that large firms require hierarchies of white-collar workers to coordinate complex production.We document that this insight continues to hold globally today, and we show that low education levels in developing countries limit the supply of white-collar workers and constrain firm size.We extend the occupational choice model of Lucas (1978) to allow entrepreneurs to reorganize their firms by allocating administrative tasks to hired professionals, which brings the firm closer to constant returns to scale.We calibrate the model to be consistent with cross-sectional microdata and validate it using quasi-experimental and experimental evidence on the effects of educational...	Niklas Engbom, Hannes Malmberg, Tommaso Porzio, et al.
8	2025	Technology and Labor Markets: Past, Present, and Future; Evidence from Two Centuries of Innovation ↗ This paper directly addresses how technological change shifts labor demand across occupations with different skill and education requirements, examining both historical patterns and future AI scenarios. It is highly relevant to understanding technology-driven shifts in industry demand and how labor markets must adjust, though it does not explicitly model education/training lags or costs that constrain supply responsiveness. We use recent advances in natural language processing and large language models to construct novel measures of technology exposure for workers that span almost two centuries.Combining our measures with Census data on occupation employment, we show that technological progress over the 20th century has led to economically meaningful shifts in labor demand across occupations: it has consistently increased demand for occupations with higher education requirements, occupations that pay higher wages, and occupations with a greater fraction of female workers.Using these insights and a calibrated model, we then explore different scenarios for how advances in artificial intelligence (AI) are likely...	Huben Liu, Dimitris Papanikolaou, Lawrence Schmidt, et al.
8	1998	Skill-biased technical change: On technology and wages in the Netherlands This paper directly examines skill-biased technical change and how technological shifts alter demand for different skill levels, a core mechanism in understanding how innovation shapes labor market requirements. It provides empirical evidence on the relationship between technical change and skill demand, which is central to understanding how talent supply must adapt to technological opportunities. This paper investigates the shift in demand away from low-skilled and towards high-skilled labour in the Netherlands over the 1990s. Making the distinction between the effects of technical change on job type and job level, the conclusion is that skill-biased technical change based on job level is the chief cause for this shift.	Allard Bruinshoofd, Bas ter Weel
8	2016	Paradise of Novelty – or Loss of Human Capital? Changing Fields and Inventive Output [Title only] The title explicitly addresses 'changing fields,' which directly maps to the project's interest in inventor mobility, cross-technology switching costs, and the transition between technology waves. It also engages with the theme of human capital loss, relating to the costs and frictions involved in skilled labor adaptation during technological shifts. No abstract available.	Sam Arts, Lee Fleming
8	2007	Prolific inventors and their mobility: scale, impact and significance. What the literature tells us and some hypotheses The paper directly addresses the project's focus on inventor mobility and the accumulation of technology-specific human capital. By analyzing how inventor movement affects productivity and invention value, it provides key insights into the transition costs and sorting mechanisms across different technology waves. In this paper we survey the literature dealing with the category of prolific inventor. We set out some elements regarding nature, scale, significance and impact of the mobility of this population of prolific inventors. In particular the paper suggests an analysis that measures the effects on mobility on individual inventive productivity and the value of invention. We call “prolificness ” the capacity to accumulate knowledge and experience through mobility (that is to say through their capital of contacts and interactions). The first goal of this paper is to survey the literature dealing with the category of prolific inventor. It is a piece of a larger research project that aims to assess...	Christian Le Bas
8	2018	Knowledge Fit and Productivity Gains from Employee Mobility ↗ [Title only] The paper directly addresses talent mobility and the costs associated with moving skills between firms or technologies, which is central to understanding labor supply flexibility. It likely provides empirical evidence on how 'knowledge fit' influences productivity, offering insights into the frictions that slow the adaptation of specialized labor during technological shifts. No abstract available.	Gaétan de Rassenfosse, Karin Hoisl
8	2025	Technological change and insuring job loss ↗ This paper directly addresses how technological change affects labor market adjustment through retraining and education costs, examining optimal policy for skill development in response to technological displacement. It integrates occupation choice, training subsidies, and employment risk—core mechanisms in the project's framework of how education and training systems affect the pace of labor supply adaptation to technology-driven shifts. We examine the role of technological change in shaping insurance to the unemployed. We integrate technological change, occupation choice, and employment risk into a Bewley-style economy to examine the optimal combination of retraining subsidies and public insurance transfers for unemployed workers. We find that the optimal policy introduces a retraining subsidy to unemployed workers and increases the generosity of transfers to the unemployed relative to current U.S. policy. The utilitarian government incorporates retraining subsidies as part of an optimal policy as they provide additional, longer run, consumption insurance after job loss while imposing only modest increases in distortionary...	J. Carter Braxton, Bledi Taska
8	2023	The economic impact of autonomous technologies and a model for the circular economy ↗ This dissertation directly addresses how autonomous technologies impact labor markets and employment, examining automation's effects on occupational demand, worker displacement, and early retirement decisions across multiple countries. While it focuses on automation's consequences rather than skill supply constraints and training systems, it provides crucial microeconomic evidence on technology-driven labor market adjustment and occupational restructuring that complements the project's core concerns about skilled labor supply responsiveness to technological change. This dissertation offers a comprehensive analysis of the wide-ranging economic implications and labour market consequences of autonomous technologies, while also considering the role of the circular economy in sustaining economic growth. Spanning three thematic areas across nine self-contained essays, the research provides a combination of macroeconomic modelling and microeconomic evidence. The thesis is divided into three main parts, leaving aside the introduction and the concluding remarks. The first part focuses on macroeconomic theoretical modelling of a dual traditional-autonomous economy, employing dynamic general equilibrium models to evaluate the impact of autonomous technologies on...	Pablo Casas
8	2024	Kecenderungan Pemilihan Kursus STEM Dalam Kalangan Pelajar Sekolah Menengah: Sorotan Literatur Bersistematik ↗ This systematic literature review examines factors influencing STEM course selection among secondary school students, directly addressing human capital formation and occupational choice in technical fields—core mechanisms through which education systems shape skilled labor supply. The paper's focus on what drives student decisions into STEM pathways is highly relevant to understanding how education systems influence the direction and magnitude of talent supply for technology-driven sectors. Science, Technology, Engineering, and Mathematics (STEM) dalam sistem pendidikan merupakan salah satu bidang yang sangat penting kepada para pelajar dalam meyediakan peluang untuk mengalami peluang belajar dalam tetapan kerjaya sebenar. Kepentingan pengintegrasian STEM dalam kurikulum matematik diberi perhatian apabila terdapat permintaan untuk kerjaya bidang STEM dalam industri pekerjaan. Justeru, data empirikal yang berkaitan dengan kecenderungan pemilihan kursus STEM dalam tempoh 2019 hingga Mac 2023 dikumpul dan disintesis untuk melaksanakan kajian literatur yang bersistematik ini. Tujuan kajian ini adalah untuk mengetahui kecenderungan pemilihan kursus STEM dalam kalangan pelajar...	Kanageswary Rethnam, Siti Mistima Maat
8	2012	Public education and economic prosperity: Semi-endogenous growth revisited This paper directly integrates public education into R&D-based growth theory and examines how education systems affect long-run growth rates, addressing a core theme of how education and training systems influence technological adaptation and labor supply. The framework's focus on realistic human capital accumulation processes and the policy effects of educational investment closely align with the project's interest in understanding education's role in shaping skilled labor supply responsiveness to technological change. We introduce publicly funded education into R&D-based economic growth theory. Our framework allows us to i) explicitly describe a realistic process of human capital accumulation within these types of growth models, ii) reconcile semi-endogenous growth theory with the empirical evidence on the relationship between economic development and population growth, and iii) revise the policy invariance result of semi-endogenous growth frameworks. In particular, we show that the model supports a negative association between economic growth and population growth if the education sector is well developed and the population growth rate is low, that is, for modern industrialized countries. Furthermore...	Klaus Prettner
8	2021	Rethinking the role of human Capital in Growth Models ↗ This paper directly addresses human capital formation and education's role in economic growth, which are core themes of the project examining how education and training systems affect labor supply adaptation and innovation. The paper's theoretical reconsideration of education's growth effects and critique of empirical findings is highly relevant to understanding the mechanisms linking training costs to skilled labor supply constraints during technological change. What role does education play in economic growth? Conventional wisdom and macroeconomic theories posit that as a nation becomes more educated, they become wealthier. The basic argument says a more educated populace is more productive (i.e. the quality of human capital increases) thereby increasing economic output. However, the majority of empirical work done on this topic has not found a strong relationship between education and economic growth. The purpose of this paper will be to identify where this body of research went wrong and offer theoretical insights ignored by this literature based in market-process theory tradition. It will draw upon an existing body of research (both empirical...	Stephen G. Zimmer
8	2025	Early specialization in higher education and labor market outcomes ↗ This paper directly examines how the timing of human capital specialization affects labor market flexibility and adaptive capacity, showing that early specialization reduces workers' ability to navigate labor market shifts—a core concern for understanding talent supply constraints during technological change. The finding that early specialization leads to less adaptive skills is highly relevant to the project's focus on how education system design shapes the pace and flexibility of skilled labor supply adjustment to demand shifts. This study empirically investigates the effects of a policy change in the Republic of Korea that lifted the restriction requiring universities to admit students to groups of departments rather than to single departments. Entry cohorts affected by the policy change had to specify their majors from the beginning of their college education. Using this policy-driven change in the timing of specialization, we find that early specialization lowered wages during early career. This negative wage effect was not driven by selection at admissions or students choosing lower-paying majors and occupations, although graduated majors shifted toward less popular majors. Rather, it is related to their...	Joseph Han, Jae-Yun Lee, Chamna Yoon
8	2024	Need for Speed: Quality of Innovations and the Allocation of Inventors ↗ This paper directly addresses R&D allocation and endogenous growth with a focus on how inventor labor is allocated between speed and quality innovations, which relates to the project's core interest in R&D allocation and innovation direction. The endogenous growth framework incorporating labor allocation decisions and the empirical analysis of how firm-level innovation choices affect aggregate outcomes align closely with the project's examination of how talent supply and innovation incentives interact during technological change. This paper studies how the speed-quality tradeoff in innovation interacts with firm dynamics, concentration, and economic growth. Empirically, we document long-run trends in the increasing speed of innovation alongside declining quality at large firms. Leveraging variation from an exogenous policy change, we document the existence of the speed-quality tradeoff both at the firm and aggregate level. We develop an endogenous growth model that incorporates the speed-quality tradeoff and show that allocating less labor towards speed increases growth, particularly in the presence of private benefits to innovation and spillovers from heterogeneous innovations. We quantify the model to link firms’...	Santiago Caicedo, Jeremy Pearce
8	2025	A dynamic Roy model of academic specialization ↗ This paper directly addresses how education systems structure human capital formation through specialization timing, which is central to understanding how training systems affect the pace of labor supply adjustment to technological change. The macroeconomic discussion of education adaptation to changes in technological speed and scope directly engages with the project's core question of how education systems shape skilled labor supply flexibility during rapid innovation. This paper generalizes the canonical model of human capital accumulation through schooling to endogenize the process of academic specialization. It provides the solution to a class of dynamic investment problems with switching and stopping under sequential uncertainty. Under mild assumptions, the model's optimal policy has a particularly simple form that can be reduced to the comparison of independent indices. The optimal policy implies that schooling should begin with a period of general education, common to all students, followed by a period of gradual academic specialization before graduation. At the microeconomic level, it is consistent with the dynamics of student course taking...	Titan Alon, Daniel Fershtman
8	2003	Skill-Biased Technological Change and Homeownership ↗ This paper directly examines how individuals adjust educational investments in response to technology-driven shifts in labor demand, aligning with the project's focus on skilled labor supply flexibility. It provides relevant empirical and theoretical evidence on how training systems and subsidies influence the pace of human capital adaptation to technological change. We investigate how individuals alter their educational investments in response to routine-biased technology. We find that individuals growing up in robot-impacted areas are more likely to complete a bachelor’s degree and experience a relative increase in earnings. Changes in the skill premium and opportunity cost appear to drive these effects. To interpret these findings, we estimate a model of endogenous skill acquisition where changes in the demand and supply of skills shape the path of earnings. Counterfactual simulations suggest that the endogenous skill response cannot fully undo the adverse earnings effects of automation unless there are sufficiently generous educational subsidies...	Alexis Anagnostopoulos, Orhan Erem Ateşağaoğlu, Eva Cárceles‐Poveda
8	2025	Educational investment and technology adoption: impact on workforce skills and firm productivity in Vietnam ↗ This paper directly examines how educational investment shapes technology adoption and labor market adjustment, finding that education increases absorptive capacity but technology transitions create short-term earnings losses for incumbent workers. It provides empirical evidence on the lag between technology-driven demand shifts and labor supply adjustment, addressing a core concern of the project about training costs and adaptation speed in skill formation systems. This study explores how educational investment impacts technology adoption and firm productivity in Vietnam. While higher education is linked to better adaptability to new technologies, its direct effect on business efficiency remains unclear. This research investigates the impact of industry-specific education and skills on wage growth and firm performance, particularly in sectors undergoing technological transformation. This study utilizes the Vietnam Household Living Standards Survey (VHLSS) and Historical Adoption of Technology (HATCH) data to employ instrumental variable analysis, assessing the causal impact of education on technology adoption and wage growth. Sectoral and worker-level...	Hang Thi Thu Trinh
8	2026	Skill Atrophy and AI Productivity Measurement ↗ The paper directly addresses the project's theme of AI impacting skill demand by modeling how AI substitution affects human capital formation and skill atrophy. It provides critical theoretical insights into the endogenous nature of skills, which is central to understanding the flexibility and constraints of skilled labor supply during technological shifts. <div> How should we measure the productivity effects of AI? Standard estimates condition <span>on current skill, but when AI substitutes for the cognitive effort that builds skill, skill </span><span>itself becomes endogenous to past AI use. We formalize pedagogical quality, the fraction </span><span>of learning-by-doing that survives AI delegation, and show it governs two measurement </span><span>biases: state-path divergence inflates within-worker panel estimates; spillover bias </span><span>degrades control groups. The biases generate a “scissors” pattern: panel and RCT </span><span>estimates diverge over time. The same mechanism produces an ability reversal in </span><span>long-run...	Tommaso Bondi, Gentry Johnson
8	2026	The Labor Market Impact of Occupation-Specific Technical Change: Inspecting the Mechanisms ↗ [Title only] This paper directly addresses the core theme of how technological shifts impact skilled labor supply by examining the mechanisms behind occupation-specific technical change. Its focus on labor market adjustment aligns well with the project's interest in the frictions and timing involved in talent adaptation to new technologies. No abstract available.	Fenella Carpena, Simon Galle
8	2023	Parental Education and Invention: The Finnish Enigma ↗ This paper directly examines how parental education shapes human capital formation and innovation outcomes, revealing causal mechanisms through which education systems influence the supply of inventors and innovators. The analysis of a comprehensive schooling reform's impact on intergenerational transmission of inventive capacity is highly relevant to understanding how education and training systems affect labor supply responsiveness to technological opportunities. Why is invention strongly positively correlated with parental income not only in the US but also in Finland which displays low income inequality and high social mobility?Using data on 1.45M Finnish individuals and their parents, we find that: (i) the positive association between parental income and off-spring probability of inventing is greatly reduced when controlling for parental education; (ii) instrumenting for the parents having a MSc-degree using distance to nearest university reveals a large causal effect of parental education on offspring probability of inventing; and (iii) the causal effect of parental education has been markedly weakened by the introduction in the early 1970s of a...	Philippe Aghion, Ufuk Akcigit, Ari Hyytinen, et al.
8	2025	Talent Allocation to Startups versus Incumbents: A Cross-Country Experiment for Germany and the United States ↗ [Title only] This paper directly addresses the allocation of skilled labor across different economic agents, which is a key mechanism in determining how efficiently talent responds to innovation and technological shifts. By comparing Germany and the US, it likely provides empirical insights into how institutional and structural factors in education and labor markets affect the pace of adaptation and growth, aligning with the project's focus on talent supply constraints and directed technical change. No abstract available.	Patrick Nüß, Ufuk Akcigit, Sabrina Jeworrek, et al.
8	2026	Attention (And Money) Is All You Need: Why Universities Are Struggling to Keep AI Talent ↗ This paper directly addresses the project's core theme of skilled labor supply constraints by empirically tracking the movement of specialized AI talent between academia and industry. It highlights how wage differentials and institutional factors create frictions in the allocation of human capital, offering crucial evidence on the pace at which specialized labor can adapt to technology-driven demand shifts. We construct a novel dataset linking academic publication records to U.S. Census employer–employee data to track 42,000 AI researchers over two decades. We document systematic changes in the allocation of AI talent. Industry increasingly attracts younger and foreign-born researchers, while gender representation improves more in academia. The top 1% of publishing industry scientists now earn $1.5 million more annually than comparable academics, a fivefold increase since 2001. Rising wage premia coincide with greater sorting into large incumbent firms. Researchers who move to industry publish less but patent more, consistent with a shift from open science toward proprietary...	Ufuk Akcigit, Craig Chikis, Emin Dinlersoz, et al.
8	2021	Structural change and the income of nations ↗ This paper directly addresses the project's themes of directed technical change and skilled labor supply by analyzing how technology adoption drives the allocation of workers to high-TFP sectors. It provides relevant macro-level evidence on the relationship between skilled labor availability and structural transformation, which contextualizes the supply-side constraints discussed in the research project. An increase in the supply of skilled labor has been common across the world. However, despite the rise in skilled labor force, not all countries have achieved high income levels, even when their structural transformation follows the same path (from agriculture to industry and, then, from industry to services). Skilled workers might end up in either high or low TFP sectors, according to two opposite theories of structural change (skill-biased structural transformation and stagnant structural transformation). We show that directed technical change is needed to achieve skill-biased structural transformation and, therefore, skilled workers are allocated to high TFP sectors. We present macrodata...	Cynthia Armas, Fernando Sánchez‐Losada
8	2026	Rising Skill Supply, Technological Changes, and Innovation: A Quantitative Exploration of China ↗ The paper directly investigates the quantitative impact of skilled labor supply expansion on firm productivity and R&D allocation, aligning with the project's focus on human capital formation and technology-driven demand shifts. It provides relevant structural evidence on how labor market adjustments influence innovation incentives and productivity growth during periods of technological change. Can the expansion of higher education lead to firm productivity growth? In this paper, we examine how China’s college expansion program contributes to the rapid growth of firms’ R&D expenditure and productivity. In our model, heterogeneous firms make endogenous R&D decisions, requiring them to allocate skilled workers between production and R&D. We structurally estimate the model using firm-level data on the level and distribution of R&D, as well as macro-level data on skill prices and sectoral allocation. Quantitative analysis reveals that between 2004 and 2018, the combination of the R&D-sector-biased technology shock, the skill-biased technology shock, and the skilled-labor supply shock...	Chengcheng Jia, Shijun Gu
8	2025	Skill Supply Meets Technological Change: Unraveling the Impact of Higher Education on Job Polarisation ↗ The paper directly addresses the interaction between skilled labor supply and technological change by modeling how an increase in education supply induces firms to adopt skill-intensive technologies. It provides relevant empirical evidence and a theoretical framework on the adjustment dynamics between human capital formation and technology adoption, which are central to the project's inquiry. The share of graduates in the UK doubled between the mid-1990s and mid-2010s, yet there was no significant decline in graduate wages or shift into lower-skilled jobs. This paper develops a general equilibrium model to explain how the labor market absorbed this surge in skilled workers. The model combines Routine-Biased Technical Change (RBTC), between-industry demand shifts, and an endogenous technology adoption mechanism that responds to changes in skill supply. As the supply of graduates grows, firms adopt more skill-intensive technologies, increasing demand for abstract occupations. Calibrated to UK data, the model replicates key employment trends and shows that education expansion...	Wenchao Jin
8	2024	Skill Supply Meets Technological Change:Unraveling the Impact of Higher Education on Job Polarisation ↗ The paper directly addresses the core theme of how education and training systems affect the pace of adaptation by modeling the interaction between skilled labor supply surges and technology adoption. It provides relevant empirical context on how the labor market absorbs increased human capital through technological shifts, although it focuses more on equilibrium absorption than the specific frictions or transition costs of skill supply lags. The share of graduates in the UK has doubled within two decades, with no significant wage decline or occupational downgrading among graduates. This paper develops an equilibrium model to illustrate how this surge in skilled labor is absorbed through firms’ adoption of new technologies and the growth of high-skilled occupations. The model incorporates Routine Biased Technical Change (RBTC), between-industry demand shifts, and shifts in the supply of skills. Counterfactual analysis suggests that of all the growth in abstract employment, half can be explained by exogenous Routine-Biased Technical Change (RBTC) and about 40% by the increase in skill supply.	Wenchao Jin
8	2025	Skill-Biased Technical Change and the Decline of Thailand's Skill Premium ↗ [Title only] This paper likely examines how technology adoption impacts the demand for skilled labor and wage inequality in an emerging market context, which relates to the project's theme of technology-driven shifts in industry demand. While it focuses on the labor market outcome rather than the supply-side constraints or training time lags central to the project, it provides crucial empirical evidence on the demand side of skilled labor dynamics during technological change. No abstract available.	Kuson Leawsakul
8	2026	Factor-Eliminating Technical Change, Human Capital Formation, and Development Traps ↗ This paper directly addresses the interaction between technical change and human capital formation, highlighting how incomplete skill upgrading can constrain capital accumulation and limit the adaptability of the labor supply. It aligns with the project's focus on training time lags and talent supply constraints by demonstrating how education responses may fail to keep pace with technology-driven shifts in demand. How does automation (factor-eliminating technical change) affect long-run development through its interaction with human capital formation? Although such technical change is often expected to promote growth, we show that it can instead slow or even halt capital accumulation. As automation displaces unskilled labor, the skill premium rises and induces education. Yet education responses are incomplete: partial skill upgrading expands the supply of skilled labor and limits further increases in skilled wages. Capital accumulation may therefore stall, trapping the economy in a low-capital steady state even when advanced technologies are available. We develop a general equilibrium model in which...	Hideki Nakamura, Ryosuke Shimizu, Shohei Momoda
8	2026	Restricting Temporary Contracts Increases Firm-Provided Training: Evidence from Spain ↗ This paper directly addresses the project's theme of how institutional factors and employment stability influence the pace and nature of skill formation and training investment. It provides empirical evidence on how labor market regulations shape human capital development, a key mechanism for understanding skilled labor supply flexibility. We examine whether restricting temporary contracts increases firms' investment in worker training, exploiting Spain’s 2022 labour market reform. Using 3.1 million online job postings from 2018 to 2024, we implement a difference-in-differences design that leverages pre-reform variation in reliance on temporary contracts across occupations. More exposed occupations shifted toward permanent hiring and increased advertised training relative to less exposed occupations. Training rose by 4.3 percentage points, fully closing the pre-reform gap by 2024. These results provide evidence that longer expected employment duration increases firms' investment in training, identifying a channel through...	Pawel Adrjan, Jonas Jessen, Carlos Victoria-Lanzon
8	2025	Dynamics of Mirrleesian Taxation in the Education Race Model ↗ This paper directly addresses the interaction between skill-biased technical change and the supply of educated labor, which are central to the project's focus on talent supply lags and technology-driven demand shifts. It provides a theoretical framework for how education systems adapt to technological changes, offering key mechanisms regarding the dynamics of skilled labor supply and optimal policy responses. The wage premium of college workers relative to non-college workers, or the so-called college wage premium, is an important aspect of earnings inequality. This paper adopts the education race model to address the question: How should Mirrleesian taxation be set dynamically in response to the evolution of the college wage premium resulting from the race between technology (skill-biased technical change, SBTC) and education (increasing supply of skills)? It is shown that while the overall structure of optimal marginal tax rates becomes progressively less over time than it would be if only the force of technology were to exist, the overall structure becomes progressively more over time than it...	Yunmin Chen, Chao Yang
8	2025	Dynamics of Mirrleesian Taxation in the Education Race Model ↗ This paper directly addresses the interaction between skill-biased technical change and the supply of educated labor, which is central to the project's inquiry into how education systems respond to technological shifts. It provides theoretical insights into the 'race' between technology and human capital formation, offering a framework for understanding the dynamics of skilled labor supply constraints and their impact on economic outcomes. The wage premium of college workers relative to non-college workers, or the so-called college wage premium, is an important aspect of earnings inequality. This paper adopts the education race model to address the question: How should Mirrleesian taxation be set dynamically in response to the evolution of the college wage premium resulting from the race between technology (skill-biased technical change, SBTC) and education (increasing supply of skills)? It is shown that while the overall structure of optimal marginal tax rates becomes less progressive over time than it would be if only the force of technology were to exist, the overall structure becomes more progressive over time than it...	Yunmin Chen, Choongryul Yang
8	2026	From Techne Equalisation to Phronesis Premium: Generative AI and Seniority Bias in Ageing Europe ↗ The paper directly addresses the interaction between generative AI and labor supply dynamics, specifically focusing on how technology adoption shifts the demand for specific skill sets like judgment over procedural competence. It provides empirical evidence on how these technology-driven shifts impact different age cohorts, offering relevant context for understanding the flexibility of skilled labor supply and the potential constraints or reallocations within the talent pool. Contrary to the prevailing view that older workers are disadvantaged by or unable to keep pace with technological change, this paper argues that generative AI may advantage them at the expense of younger ones. The mechanism operates through two channels. First, generative AI equalises procedural competence (techne) across occupations and within the same occupation and task, enabling average and lower-performing workers to reach the quality of top performers, an executional prosthesis that recovers skills depreciated with age. Second, as execution becomes cheap and replicable, the scarce factor shifts to skills that AI cannot easily replicate yet, such as contextual judgment and responsible...	Dora Moscato
8	2025	How AI Skills Shape Labor Income Shares: Evidence from Online Job Vacancies in China ↗ This paper closely relates to the project by empirically examining how AI skill acquisition impacts labor economics within specific industrial contexts, directly addressing the theme of AI and skill demand. It provides valuable evidence on the labor market adjustment process and the expansion of the talent pool, which are key mechanisms in understanding how human capital formation responds to technological shifts. Based on a comprehensive analysis of online recruitment data of Chinese listed firms from 2016 to 2022, the China Stock Market and Accounting Research (CSMAR) database and the China City Statistical Yearbooks, this study finds that improvements in employees’ AI skills significantly increase the labor income share. This positive effect is further reinforced when corporate costs decline and the talent pool expands. The heterogeneity analysis further indicates that the effect is more pronounced in firms located in cities with higher housing prices, in industries with greater technological sophistication, and within supply chains characterized by lower levels of integration.	Yunyun Liu, Yuqiao Hou, Yue Liu
8	2025	Maximizing Human Capital Potential: Why We Need Human Capital Driven Economic Models and Economic Planning ↗ [Title only] The title explicitly advocates for human capital driven economic models, directly addressing the project's focus on how education and training systems shape labor supply flexibility. It aligns well with the core themes of endogenous growth and the constraints imposed by talent supply on technological adaptation. No abstract available.	Sujay Rao Mandavilli
8	2025	Build it and They Will Come? Us Regional Labor Composition \& Readiness to Meet Skill Demand Shocks from Chips and Science ↗ This paper directly addresses the core theme of skilled labor supply constraints by quantifying how quickly a regional workforce can adapt to technology-driven demand shocks from the CHIPS and Science Act. It provides a relevant empirical framework for analyzing talent supply lags and labor market adjustment frictions in the context of rapid industrial technological change. The CHIPS and Science Act has led to the announcement of at least 55,116 jobs in the Semiconductors and Electronics industry, representing a significant demand shock, often in regions without an incumbent semiconductor workforce. Many workers entering these roles, such as semiconductor processing technicians, will need to come from occupations that only partially match the skills required by the new demand for semiconductor production. We present an analytical methodology to quantify the potential stock and flow of talent from these partially matched occupations, to support a boundary analysis of labor market readiness to meet new demand. Our methods serve as a 'what-if analysis tool,'...	Elizaveta Gonchar, Christophe Combemale, Krishnan Ramayya
8	2022	Does Human Capital Expansion Improve Urban Innovation? Quasi-Experimental Evidence from China's Higher Education Expansion Policy ↗ The paper directly addresses the project's focus on human capital formation by providing quasi-experimental evidence that a sudden supply shock in higher education significantly boosts urban innovation, particularly in S&E fields. It offers critical empirical insights into how education systems influence the pace of adaptation to technological opportunities through mechanisms like talent agglomeration, which aligns with the study of directed technical change and skilled labor supply dynamics. This paper studies how the Chinese human capital expansion policy—the internationally exceptionally expanded enrollment in higher education—which served as an unprecedented, huge and sudden supply shock to prefecture-level cities—affects urban innovation. Using the standard difference-in-differences approach, we find that prefectures with a higher number of universities obtain a larger gain in urban innovation after 2003. More importantly, this study shows that the expansion of human capital in S&E; fields is playing the most major role in promoting urban innovation. It also shows that urban innovation of prefectures are particularly positive and affected by the HE expansion policy in...	Yian Chen, Guiping Li
8	2024	Inventor Returns and Mobility ↗ This paper directly investigates the mobility of skilled inventors and the associated wage premiums, which aligns with the project's focus on inventor mobility and entry cohort wage effects. It provides empirical evidence on how labor market frictions and firm-specific returns influence the allocation of specialized human capital across technology contexts. We show that firm and industry, rather than inventor and invention factors, explain more than half of the variation in inventor returns in administrative employer-inventor-patent linked data from Germany. Between-firm variation in inventive rents is strongly associated with inventor mobility. Inventors are more likely to make a move just before a patent is filed than shortly thereafter and benefit from their move through a mobility-related marginal inventor return. Employers that pay inventor returns in excess of the expected return gain a favorable position in the market for inventive labor with subsequent increases in patent quality and quantity. Consistent with theoretical arguments...	Dietmar Harhoff, David Heller, Paul P. Momtaz
8	2024	Inventors' Coworker Networks and Innovation ↗ This paper directly investigates the mobility of skilled inventors and how labor network connections facilitate the transfer of specialized human capital between firms. It provides empirical evidence on transition costs and the role of coworker networks in reallocating talent, which is central to understanding how labor supply adjusts during technological shifts. This paper presents direct evidence on how firms' innovation is affected by access to knowledgeable labor through co-worker network connections. We use a unique dataset that matches patent data to administrative employer - employee records from "Third Italy" - a region with many successful industrial clusters. Establishment closures displacing inventors generate supply shocks of knowledgeable labor to firms that employ the inventors' previous co-workers. We estimate event-study models where the treatment is the displacement of a "connected" inventor (i.e., a previous coworker of a current employee of the focal firm). We show that the displacement of a connected inventor significantly...	Sabrina Lucia Di Addario, Zhexin Feng, Michel Serafinelli
8	2025	Occupations, Human Capital Accumulation and Inequality ↗ [Title only] This title directly addresses the core themes of human capital accumulation and the resulting distributional effects, which are central to understanding how education and training costs shape labor supply. Although it does not explicitly mention technology shocks or specific innovation waves, the analysis of inequality through the lens of occupational human capital is highly relevant to the project's investigation of talent supply constraints and skill demand shifts. No abstract available.	Andrés Erosa, Luisa Fuster, Gueorgui Kambourov, et al.
8	2026	Pioneer Advantage as an Equilibrium Composite ↗ This paper directly addresses the project's focus on entry cohort wage premiums by providing a rigorous econometric framework to disentangle tenure effects from pure pioneering advantages in labor markets. Its insights into strategic entry timing and identification challenges are highly relevant for understanding how the timing of specialization within technology waves affects worker outcomes. A large empirical literature documents that early entrants outperform later ones, often interpreted as pioneering advantage. This paper asks what an entry-order coefficient identifies in a dynamic game with strategic entry. Tenure equals calendar time minus entry time, an accounting identity that creates an age--period--cohort colinearity. The novel obstruction is strategic: entry timing simultaneously determines rank and tenure, so any rank-shifting variable also shifts tenure, foreclosing the standard remedies. Reduced-state rank coefficients identify equilibrium composites mixing ordinal effects with tenure effects weighted by inter-entrant gaps. A calibrated simulation shows the bias is...	Nathan Yang
8	2024	Early Specialization in Higher Education and Labor Market Outcomes ↗ [Title only] This paper directly addresses the core theme of early talent supply and specialization timing, which is crucial for understanding how quickly skilled labor can adapt to technological shifts. It likely provides evidence on entry cohort effects and the costs associated with early human capital formation, offering insights into the flexibility of the labor supply curve. No abstract available.	Joseph Han, Jae-Yun Lee, Chamna Yoon

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