Template-type: ReDif-Paper 1.0
Author-Name: Hollanders, Hugo
Author-Name: Weel, Bas ter
Author-workplace-name: MERIT 
Title: Skill-Biased Technological Change in an Endogenous Growth Model
Abstract: When new technologies are introduced in the production process or when technological change is incorporated in an economic model, it is agreed upon that this reduces the demand for low-skilled labour relative to the demand for high-skilled labour. In general the rationale for this argument is that high-skilled workers and capital are complements, whereas high-skilled labour and low-skilled labour are substitutes, e.g. many routine assembly activities are replaced. In addition, it is acknowledged that high-skilled workers adapt more easily to changing technologies than their low-skilled colleagues. Finally, the computer revolution increases the productivity of high-skilled workers more than the productivity of low-skilled workers, leading to wage dispersion. This paper develops a model of endogenous growth with heterogenous labour, which leads to skill-biased technological change and wage dispersion. In order to do so, we discuss the changing skills profile in terms of a dynamic model.
Keywords: labour economics ; 
Series: Research Memoranda
Creation-Date: 1998
Number: 016
File-URL: https://unu-merit.nl/publications/rmpdf/1998/rm1998-016.pdf
File-Format: application/pdf
File-Size: 106891
Handle: RePEc:unm:umamer:1998016