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Factor Supplies and the Direction of Technological Change

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  • Svaleryd, Helena
  • Vlachos, Jonas

Abstract

In this paper, we empirically address the hypothesis that there is a relationship between the supply of human capital and the rate and direction of skill-biased technical change (SBTC). Using country- and industry-level data on OECD countries, we find R&D to be positively related to the supply of human capital. There is, however, no indication that this translates into higher rates of SBTC, when SBTC is measured as changes in the wage bill share of skilled labour. Interestingly, both R&D and the rate of SBTC seem to be relatively high in low-skill industries in countries where the supply of human capital is relatively high.

Suggested Citation

  • Svaleryd, Helena & Vlachos, Jonas, 2005. "Factor Supplies and the Direction of Technological Change," CEPR Discussion Papers 5086, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:5086
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    References listed on IDEAS

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    1. Daron Acemoglu, 2003. "Cross-Country Inequality Trends," Economic Journal, Royal Economic Society, vol. 113(485), pages 121-149, February.
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    More about this item

    Keywords

    skill-biased technical change; supply of human capital;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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