AEA Home

Document Request

You have requested the following article:
Occupational Exposure to Capital-Embodied Technical Change
Julieta Caunedo, David Jaume, and Elisa Keller
American Economic Review. Jun 2023, Vol. 113, No. 6: Pages 1642-1685

Occupational Exposure to Capital-Embodied Technical Change†

Julieta Caunedo1, David Jaume2 and Elisa Keller3

1Rotman School of Management, University of Toronto (email: )

2Banco de Mexico (email: )

3Department of Economics, University of Exeter (email: )


We study differences in exposure to factor-biased technical change among occupations by providing the first measures of capital-embodied technical change (CETC) and of the elasticity of substitution between capital and labor at the occupational level. We document sizable occupational heterogeneity in both measures, but quantitatively, it is the heterogeneity in factor substitutability that fuels workers’ exposure to CETC. In a general equilibrium model of worker sorting across occupations, CETC accounts for almost all of the observed labor reallocation in the US between 1984 and 2015. Absent occupational heterogeneity in factor substitutability, CETC accounts for only 17 percent of it (JEL I26, J16, J24, J31, O33)