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Implications of skill-biased technological change: International evidence

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  • Berman, E
  • Bound, J
  • Machin, S

Abstract

Demand for less-skilled workers plummeted in developed countries in the 1980s. In open economies, pervasive skill-biased technological change (SBTC) can explain this decline. SBTC tends to increase the domestic supply of unskill-intensive goods by releasing less-skilled labor. The more countries experiencing a SBTC, the greater its potential to decrease the relative wages of less-skilled labor by increasing the world supply of unskill-intensive goods. We find strong evidence for pervasive SBTC in developed countries. Most industries increased the proportion of skilled workers despite generally rising or stable relative wages. Moreover, the same manufacturing industries simultaneously increased demand for skills in different countries. Many developing countries also show increased skill premiums, a pattern consistent with SBTC.

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Paper provided by University College London in its series Open Access publications from University College London with number http://discovery.ucl.ac.uk/16913/.

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Date of creation: Nov 1998
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Publication status: Published in Q J ECON (1998-11) v.113, p.1245-1279
Handle: RePEc:ner:ucllon:http://discovery.ucl.ac.uk/16913/

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  1. Haskel, Jonathan & Slaughter, Matthew, 1998. "Does the Sector Bias of Skill-Biased Technical Change Explain Changing Wage Inequality?," CEPR Discussion Papers 1940, C.E.P.R. Discussion Papers.
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