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Technology and the Demand for Skills

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  • Edward N. Wolff

Abstract

The U.S. economy has undergone major structural changes since 1950. First, there has been a gradual shift of employment from goods-producing industries to service-providing industries. Second, since the 1970s at least, the availability of new information-based technologies has made possible substantial adjustments in operations and organizational re- structuring of firms. This has been accelerated, in part, by sharply increasing competition from imports. Evidence from industry level case studies indicate that this restructuring is likely to have important consequences for the level and composition of skills required in the U.S. workplace (see Adler, 1986, and Zuboff, 1988). The direction and extent of changes in skill levels over the longer run has, however, been more uncertain, with case studies often finding a deskilling of the content of production jobs and aggregate studies finding little change or at most a gradual upgrading in overall occupation mix (see Spenner, 1988, for a survey of this literature). These trends have considerable policy significance since they help determine education and training needs. One important result of this paper, for example, is that a growing mismatch has been occurring between skill requirements of the workplace and educational attainment of the workforce, with the latter increasing much more rapidly than the former.
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  • Edward N. Wolff, 1995. "Technology and the Demand for Skills," Economics Working Paper Archive wp_153, Levy Economics Institute.
  • Handle: RePEc:lev:wrkpap:wp_153
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    References listed on IDEAS

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    1. Eli Berman & John Bound & Zvi Griliches, 1993. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
    2. Kenneth J. Arrow, 1962. "The Economic Implications of Learning by Doing," Review of Economic Studies, Oxford University Press, vol. 29(3), pages 155-173.
    3. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February.
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    Cited by:

    1. Skott, Peter, 2005. "Fairness as a source of hysteresis in employment and relative wages," Journal of Economic Behavior & Organization, Elsevier, vol. 57(3), pages 305-331, July.
    2. Edward N. Wolff, 2005. "Computerization and Rising Unemployment Duration," Eastern Economic Journal, Eastern Economic Association, vol. 31(4), pages 507-536, Fall.
    3. Xavier Cuadras Morató & Xavier Mateos-Planas, 2006. "Wage inequality and unemployment with overeducation," Economics Working Papers 938, Department of Economics and Business, Universitat Pompeu Fabra.
    4. Piva, Mariacristina & Santarelli, Enrico & Vivarelli, Marco, 2005. "The skill bias effect of technological and organisational change: Evidence and policy implications," Research Policy, Elsevier, vol. 34(2), pages 141-157, March.
    5. Jorge Saba Arbache, 2001. "Trade Liberalisation and Labor Markets in Developing Countries: Theory and Evidence," Studies in Economics 0112, School of Economics, University of Kent.
    6. Edward N. Wolff, "undated". "Skills, Computerization, and Earnings in the Postwar U.S. Economy," Economics Working Paper Archive wp_331, Levy Economics Institute.
    7. Peter Dolton, 2001. "Over education in the graduate labour market: Some evidence from alumni data," CEE Discussion Papers 0009, Centre for the Economics of Education, LSE.
    8. Peter Skott, 2006. "Wage inequality and overeducation in a model with efficiency wages," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 39(1), pages 94-123, February.
    9. Skott, Peter & Auerbach, Paul, 2003. "Wage inequality and skill asymmetries," Economics Discussion Papers 2003-7, School of Economics, Kingston University London.
    10. Paul Auerbach & Peter Skott, "undated". "Skill Asymmetries, Increasing Wage Inequality and Unemployment," Economics Working Papers 2000-18, Department of Economics and Business Economics, Aarhus University.
    11. Soete, Luc & Weel, Bas ter, 1999. "Innovation, Knowledge Creation and Technology Policy in Europe," Research Memorandum 001, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    12. Spitz, Alexandra, 2003. "IT Capital, Job Content and Educational Attainment," ZEW Discussion Papers 03-04, ZEW - Leibniz Centre for European Economic Research.
    13. Bruinshoofd, Allard & Weel, Bas ter, 1998. "Skill-biased technical change: On technology and wages in the Netherlands," Research Memorandum 021, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).

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