NBER: Machinery's Skill Bias Comes From Suppliers — High-STEM Demand Rises 45% Externally
soumitrashukla9 · x · 2026-10-10
An NBER working paper by Bijnens, Humlum, and Vanormeleringen resolves a puzzle using Belgian firm data: new machinery raises demand for skilled labor, but the skill bias arises entirely outside the investing firm.
- After machinery investment spikes, purchases from suppliers raise firms' high-STEM demand by 45%, triple other skill groups; in-house hiring adds under 5%, evenly across skills
- Demand comes first from machine integrators, later software and complementary services; stronger for smaller firms, lumpier investments, and fast-moving capital
- A general-equilibrium model estimates 2003-2021 machinery growth raised relative high-STEM demand by 8.8 log points and wage premium by 3.1 — both would appear to fall if measured on payrolls alone
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