Technology and Changes in Skill Structure: Evidence from an International Panel of Industries
AbstractMuch of the dramatic change in skill and wage structure observed in recent years in the United States is believed to stem from the impact of new technology. This paper compares the changing skill structure of wages and employment in the United States with three other advanced developed countries - the UK (where wage inequality has risen even faster in the 1980s than in the US), Denmark (where unemployment has risen, but wage inequality but not grown very much) and Sweden (where wage inequality and unemployment has remained has remained stable over our sample). We base most of our analysis on a newly constructed panel of two-digit industries covering 17 years but also, where necessary, use other data sources at various levels of aggregation. We investigate how far technical change can explain the growth of the share of skilled workers (by occupation or education) has occurred in all countries. Like the US, most of this shift towards an increased usage of more skilled workers has occurred within industries. Furthermore, evidence of the complementarily of human capital with physical capital and with new technology is uncovered in all four countries. Nevertheless, technology can only account for a relatively small part (about 1/4) of the changes in the skill structure of the labour marker in the Anglo-American nations. In Sweden, however, a substantial part of the change is accounted for by technology. It seems likely like, over and above any effect from skill biased technological change, the observed changes in skill structure in Britain and America are also linked to the structure of labourr market institutions, such as the declining role of trade unions and collective bargaining.
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Bibliographic InfoPaper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0297.
Date of creation: May 1996
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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP
Other versions of this item:
- Machin, Steve & Van Reenen, John, 1996. "Technology and Changes in Skill Structure: Evidence from an International Panel of Industries," CEPR Discussion Papers 1434, C.E.P.R. Discussion Papers.
- Stephen Machin & Annette Ryan & John Van Reenen, 1996. "Technology and changes in skill structure: Evidence from an international panel of industries," IFS Working Papers W96/06, Institute for Fiscal Studies.
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
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