Implications of Skill-Biased Technological Change: International Evidence

Demand for less skilled workers decreased dramatically in the US and in other developed countries over the past two decades. We argue that pervasive skill biased technological change rather than increased trade with the developing world is the principal culprit. The pervasiveness of this technological change is important for two reasons. First, it is an immediate and testable impication of technologiacl change. Second, under standard assumptions, the more pervasive the skill biased technologiacl change the greater the increase in the embodied supply of less skilled workers and the greater the depressing effect on their relative wages through world goods prices.