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Factor-Biased Technological Change and the Skill Premium: A Cross-Country Evidence

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  • Vladimir Matveenko
  • Shamil Sharapudinov

Abstract

This paper provides a cross-country analysis of trends in the skill premium and in the relative supply of high-skilled labor based on the data for 21 OECD countries over the last decades of the twentieth century. We document that, in contrast to the steadily increasing trends in the relative supply of high-skilled labor, the dynamics of the skill premium varies substantially across the countries. One of the main empirical findings of the paper is the evidence that both US and European countries experienced skill-biased rather than unskill-biased technological change. We also develop a new modification of the Acemoglu's directed technological change model and show that such modification is helpful in explaining the skill premium patterns.

Suggested Citation

  • Vladimir Matveenko & Shamil Sharapudinov, 2016. "Factor-Biased Technological Change and the Skill Premium: A Cross-Country Evidence," EUSP Department of Economics Working Paper Series 2016/05, European University at St. Petersburg, Department of Economics.
    • Handle: RePEc:eus:wpaper:ec2016_05
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    References listed on IDEAS

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    More about this item

    Keywords

    skill premium; factor-biased technological change; directed technological change;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • 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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