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Ability-Biased Technological Transition, Wage Inequality, And Economic Growth

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Oded Galor
Omer Moav

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Abstract

This paper develops a growth model characterized by ability-biased technological transition in which the evolution of technology, education attainment, and wage inequality is consistent with the observed pattern in the United States and other advanced countries over the past several decades. It argues that an increase in the rate of technological progress raises the return to ability and simultaneously generates an increase in wage inequality between and within groups of skilled and unskilled workers, an increase in average wages of skilled workers, a temporary decline in average wages of unskilled workers, an increase in education, and a productivity transitory slowdown. © 2000 the President and Fellows of Harvard College and the Massachusetts Institute of Technology

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Article provided by MIT Press in its journal The Quarterly Journal of Economics.

Volume (Year): 115 (2000)
Issue (Month): 2 (May)
Pages: 469-497
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Handle: RePEc:tpr:qjecon:v:115:y:2000:i:2:p:469-497

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