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Skill-Biased Demand Shifts and the Wage Collapse in the United States: A Critical Perspective

Author

Listed:
  • David R. Howell

    (New School for Social Research)

  • Susan S. Wieler

    (Columbia University)

Abstract

The earnings of low-skill workers in the United States have fallen sharply since the late 1970's in both real and relative terms, an experience not shared by other advanced nations. It is widely held that the problem lies in skill-biased technological change: strong shifts in labor demand away from the least skilled caused by workplace computerization. With measures developed from both household and establishment data, we show that the skill mix of employment remained virtually unchanged after 1982 in computer-intensive manufacturing and service sectors, precisely the period in which computerization should have had its greatest employment impacts. We also find no association between wage growth and changes in skill mix across large occupation-industry groups. We conclude by suggesting that more weight should be placed on shifts in labor market institutions, public policies and managerial strategies in explaining the wage collapse.

Suggested Citation

  • David R. Howell & Susan S. Wieler, 1998. "Skill-Biased Demand Shifts and the Wage Collapse in the United States: A Critical Perspective," Eastern Economic Journal, Eastern Economic Association, vol. 24(3), pages 343-366, Summer.
    • Handle: RePEc:eej:eeconj:v:24:y:1998:i:3:p:343-366
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    File URL: http://web.holycross.edu/RePEc/eej/Archive/eeconj/Volume24/V24N3P343_366.pdf
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    Citations

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    Cited by:

    1. Rimler, Judit, 2003. "Ecset vagy egér. Mesterségbeli tudás és magas szintű technika [Brush or mouse. Occupational capabilities and high technology]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(12), pages 1095-1114.
    2. Didier, Nicolas, 2024. "Turning fragments into a lens: Technological change, industrial revolutions, and labor," Technology in Society, Elsevier, vol. 77(C).
    3. Caitlin Cullen Donaldson & Suzanne O’Keefe, 2013. "The Effects of Manufacturing on Educational Attainment and Real Income," Economic Development Quarterly, , vol. 27(4), pages 316-324, November.
    4. Nichola Lowe & Greg Schrock & Ranita Jain & Maureen Conway, 2021. "Genesis at work: Advancing inclusive innovation through manufacturing extension," Local Economy, London South Bank University, vol. 36(3), pages 224-241, May.
    5. Frederick Guy & Peter Skott, 2008. "Information and Communications Technologies, Coordination and Control, and the Distribution of Income," Journal of Income Distribution, Ad libros publications inc., vol. 17(3-4), pages 71-92, September.
    6. Matthew J. Slaughter, 2002. "Does Inward Foreign Direct Investment Contribute to Skill Upgrading in Developing Countries?," SCEPA working paper series. 2002-08, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    7. Lawrence Mishel, 2022. "How automation and skill gaps fail to explain wage suppression or wage inequality [Are the Job Prospects of Recent College Graduates Improving?]," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 31(2), pages 269-280.
    8. Cassandra M. Guarino, 2005. "Reinterpreting the Skill-biased Technological Change Hypothesis A Study of Technology, Firm Size, and Wage Inequality in the California Hospital Industry," Working Papers WR-316, RAND Corporation.
    9. Cassandra M. Guarino, 2005. "Reinterpreting the Skill-biased Technological Change Hypothesis A Study of Technology, Firm Size, and Wage Inequality in the California Hospital Industry," Working Papers 316, RAND Corporation.

    More about this item

    Keywords

    Earnings; Labor Demand; Skill Biased; Skills; Technological Change; Wage;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • 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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