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The New Economy and Demand for Skills


  • Ross Kelly

    () (University of Western Australia)

  • Philip E.T. Lewis

    (University of Canberra)


There has been an increasing dispersion in earnings observed in many OECD countries over the last two decades along with shedding of low skill workers and increased demand for skilled workers. This has been attributed to a number of diffent causes including skill-biased technological change. In this paper the attributes of different occupations are used to obtain measures of three distinct skill dimensions- motor skills, interactive skills and cognitive skills- plus education. The paper presents an analysis of skill change for each of the skill dimensions over the period 1986 to 1996. Further analysis is carried out using regression modelling to determine whether the IT intensity of an industry has had any influence on the extent of skill change over the period being analysed. The main finding is that industries that spend a relatively high proportion of capital expenditure on IT equipment, after controlling for other factors, also have experienced a decrease in the average interactive skill level of the workforce. Other measures of IT intensity are positively related with most skill dimensions, the main exception being motor skills.

Suggested Citation

  • Ross Kelly & Philip E.T. Lewis, 2003. "The New Economy and Demand for Skills," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 6(1), pages 135-152, March.
  • Handle: RePEc:ozl:journl:v:6:y:2003:i:1:p:135-152

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    More about this item


    Technological Change: General Technological Change: Choices and Consequences (includes Impact on Production; Welfare; Income Distribution; International Competitiveness; Military Power; Measurement; and Case Studies; International Transfer of Technology);

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes


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