Why will Technical Change not be Permanently Skill-Biased?

Posted: 7 Mar 2008 Last revised: 11 Dec 2013

See all articles by Patricia Crifo

Patricia Crifo

Ecole Polytechnique, Paris - Laboratoire d'Econometrie; Université Paris X Nanterre - Department of Economics; Center for Interuniversity Research and Analysis on Organization (CIRANO)

Etienne Lehmann

CREST; Catholic University of Louvain (UCL) - School of Economic and Social Research (IRES); IZA Institute of Labor Economics

Date Written: 2004

Abstract

We contribute to the debate on skill-biased technical change by studying the long-run dynamics of skill premia in an endogenous growth model in which technical change can be directed towards different factors. We show that R&D resources tend to be directed alternately towards skill-intensive and unskilled-intensive goods, creating cycles in skill premia. If resources were constantly directed towards the same sector, an innovation in a different sector would not be threatened by future innovators. Hence, researchers are incited to switch from one sector to another, in order to avoid the negative effect of innovations constantly occurring in the same sector.

Keywords: Innovation-driven growth, Wage inequality, Skill-biased technical change, Cycles

JEL Classification: J31, O31, O41

Suggested Citation

Crifo, Patricia and Lehmann, Etienne, Why will Technical Change not be Permanently Skill-Biased? (2004). Review of Economic Dynamics, Vol. 7, No. 1. Available at SSRN: https://ssrn.com/abstract=1103043

Patricia Crifo (Contact Author)

Ecole Polytechnique, Paris - Laboratoire d'Econometrie ( email )

Route de Saclay
Palaiseau, 91128
France

Université Paris X Nanterre - Department of Economics

Nanterre Cedex, 92001
France

Center for Interuniversity Research and Analysis on Organization (CIRANO)

2020 rue University, 25th floor
Montreal H3C 3J7, Quebec
Canada

Etienne Lehmann

CREST ( email )

France

Catholic University of Louvain (UCL) - School of Economic and Social Research (IRES) ( email )

3, Place Montesquieu
1348 Louvain-la-Neuve
Belgium

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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