Technological change and labor market in the trade and services sector in Mexico

Abstract

This paper studies the hypothesis of biased technological change (HCTS) in the trade and services sector in Mexico, 2005-2019. The HCTS suggests that new technologies are currently biased towards more educated workers compared to those with less skills. The objective is to analyze the relationship between qualified labor supply and abstract tasks with information from the National Survey of Occupation and Employment. An optimal control model is developed, where the trajectory of technological change is analyzed to determine the demand for employment assigned in analytical tasks, and then a panel data model is used to confirm this relationship. The results in general show for the industry in Mexico, that work experience is decisive to explain the labor assignment in abstract tasks. At the regional level, it is shown that the North region confirms the HCTS, while in the South, the work experience determines the abstract tasks.