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Technical Change, Inequality, and The Labor Market (2002)
| Venue: | Journal of Economic Literature |
| Citations: | 425 - 6 self |
BibTeX
@ARTICLE{Acemoglu02technicalchange,,
author = {Daron Acemoglu},
title = {Technical Change, Inequality, and The Labor Market},
journal = {Journal of Economic Literature},
year = {2002},
pages = {7--72}
}
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Abstract
This essay discusses the effect of technical change on wage inequality. I argue that the behavior of wages and returns to schooling indicates that technical change has been skill-biased during the past sixty years. Furthermore, the recent increase in inequality is most likely due to an acceleration in skill bias. In contrast to twentiethcentury developments, much of thr technical change during the early nineteenth century appears to be skill-replacing. I suggest that this is because the increased supply of unskilled workers in the English cities made the introduction of these technologies profitable. On the other hand, the twentieth century has been characterized by skillbiased technical change because the rapid increase in the supply of skilled workers has induced the development of skill-complementary technologies. The recent acceleration in skill bias is in turn likely to have been a response to the acceleration in the supply of skills during the past several decades.
Keyphrases
technical change labor market skill bias recent acceleration thr technical change wage inequality unskilled worker rapid increase skill-complementary technology past several decade skilled worker recent increase early nineteenth century twentieth century increased supply english city skillbiased technical change past sixty year
