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The Supply of Skilled Labour and Skill-Biased Technological Progress

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Kiley, Michael T

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Abstract

This paper presents a model in which the adoption of skill-biased or "unskilled-biased" technologies is endogenous. In this model of endogenous technology choice, an increase in the supply of skilled labour leads to a temporary fall in the skill premium, followed by an expanding gap between the wages of skilled and unskilled workers as technologies adjust towards the more skill-intensive mix appropriate for the greater skill of the workforce. The adjustment in the technology mix results in slower output growth along the transition path.

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Publisher Info
Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 109 (1999)
Issue (Month): 458 (October)
Pages: 708-24
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Handle: RePEc:ecj:econjl:v:109:y:1999:i:458:p:708-24

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Galor, O. & Tsiddon, D., 1996. "Technological Progress, Mobility and Economic Growth," Papers 13-96, Tel Aviv.
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  2. Acemoglu, Daron, 1996. "Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence," CEPR Discussion Papers 1459, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  3. Greenwood, J., 1996. "The Third Industrial Revolution," RCER Working Papers 435, University of Rochester - Center for Economic Research (RCER).
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  4. Machin, Stephen & Manning, Alan, 1997. "Can supply create its own demand? Implications for rising skill differentials," European Economic Review, Elsevier, vol. 41(3-5), pages 507-516, April. [Downloadable!] (restricted)
  5. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February. [Downloadable!] (restricted)
  6. John Bound & George Johnson, 1995. "What are the causes of rising wage inequality in the United States?," Economic Policy Review, Federal Reserve Bank of New York, issue Jan, pages 9-17. [Downloadable!]
  7. Richard R. Nelson & Edmond S. Phelps, 1965. "Investment in Humans, Technological Diffusion and Economic Growth," Cowles Foundation Discussion Papers 189, Cowles Foundation, Yale University. [Downloadable!]
  8. Robert J. Barro & Paul Romer, 1993. "Economic Growth," NBER Books, National Bureau of Economic Research, Inc, number barr93-1.
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    • Robert J. Barro & Paul M. Romer, 1991. "Economic Growth," NBER Books, National Bureau of Economic Research, Inc, number barr91-1.
  9. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June. [Downloadable!] (restricted)
  10. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Juergen Antony, 2005. "Weak Scale Effects in Growth Models," Discussion Paper Series 276, Universitaet Augsburg, Institute for Economics. [Downloadable!]
  2. Cozzi, Guido & Impullitti, Giammario, 2006. "Technological policy and wage inequality," MPRA Paper 10140, University Library of Munich, Germany. [Downloadable!]
  3. Ronald Benabou, 2002. "Human capital, technical change and the welfare state," Temi di discussione (Economic working papers) 465, Bank of Italy, Economic Research Department. [Downloadable!]
    Other versions:
  4. Juergen Antony, 2007. "Depletion of Non-Renewable Resources and Endogenous Technical Change," Discussion Paper Series 291, Universitaet Augsburg, Institute for Economics. [Downloadable!]
  5. Leonardo Becchetti & Luigi Paganetto & David Andres Londono Bedoya, 2003. "ICT Investment, Productivity and Efficiency: Evidence at Firm Level Using a Stochastic Frontier Approach," CEIS Research Paper 29, Tor Vergata University, CEIS. [Downloadable!]
    Other versions:
  6. Maria Rosaria Carillo, 2000. "The Effects Of Professionalisation And The Demand For Social Status On The Adoption Of New Technologies," Working Papers 1_2000, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy. [Downloadable!]
    Other versions:
  7. Daron Acemoglu, 2005. "Equilibrium Bias of Technology," NBER Working Papers 11845, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  8. Bas Jacobs, . "The lost race between schooling and technology," CPB Discussion Papers 25, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
    Other versions:
  9. Borghans,Lex & Weel,Bas,ter, 2002. "The Diffusion of Computers and the Distribution of Wages," Research Memoranda 039, Maastricht : MERIT, Maastricht Economic Research Institute on Innovation and Technology. [Downloadable!]
    Other versions:
  10. Meckl, Juergen & Zink, Stefan, 2002. "Solow and Heterogeneous Labor: A Neoclassical Explanation of Wage Inequality," IZA Discussion Papers 668, Institute for the Study of Labor (IZA). [Downloadable!]
  11. Isabelle Armanville & Peter Funk, 2003. "Induced innovation: an empirical test," Applied Economics, Taylor and Francis Journals, vol. 35(15), pages 1627-1647, October. [Downloadable!] (restricted)
  12. Christian Groth, 2004. "Innovation and growth: What have we learnt from the robustness debate?," Discussion Papers 04-29, University of Copenhagen. Department of Economics, revised Nov 2004. [Downloadable!]
  13. Juergen Antony, 2003. "Directed Sector and Skill-Specific Technological Change: The Development of Wages for the High and Low Skilled," Discussion Paper Series 236, Universitaet Augsburg, Institute for Economics. [Downloadable!]
  14. Roland Benabou, 2004. "Inequality, Technology, and the Social Contract," NBER Working Papers 10371, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  15. Matthias Weiss, 2005. "On the Evolution of Wage Inequality in Acemoglu’s Model of Directed Technical Change," MEA discussion paper series 05099, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
    Other versions:
  16. Paul Auerbach & Peter Skott, . "Skill Asymmetries, Increasing Wage Inequality and Unemployment," Economics Working Papers 2000-18, School of Economics and Management, University of Aarhus. [Downloadable!]
  17. Leonardi, Marco, 2003. "Product Demand Shifts and Wage Inequality," IZA Discussion Papers 908, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  18. Guido Cozzi & Giammario Impullitti, . "Technology Policy and Wage Inequality," Working Papers 2008_23, Department of Economics, University of Glasgow, revised Oct 2006. [Downloadable!]
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