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The Supply of Skilled Labour and Skill-Biased Technological Progress

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  • Kiley, Michael T

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.

Suggested Citation

  • Kiley, Michael T, 1999. "The Supply of Skilled Labour and Skill-Biased Technological Progress," Economic Journal, Royal Economic Society, vol. 109(458), pages 708-724, October.
  • Handle: RePEc:ecj:econjl:v:109:y:1999:i:458:p:708-24
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    References listed on IDEAS

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    1. Per Krusell & Lee E. Ohanian & JosÈ-Victor RÌos-Rull & Giovanni L. Violante, 2000. "Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis," Econometrica, Econometric Society, vol. 68(5), pages 1029-1054, September.
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    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 410-442, June.
    10. James A. Kahn & Jong-Soo Lim, 1998. "Skilled Labor-Augmenting Technical Progress in U. S. Manufacturing," The Quarterly Journal of Economics, Oxford University Press, vol. 113(4), pages 1281-1308.
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