Technological Change and Wages: An Interindustry Analysis

Posted: 1 Jul 1999

See all articles by Ann P. Bartel

Ann P. Bartel

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER)

Nachum Sicherman

Columbia University; IZA Institute of Labor Economics

Abstract

Previous research has shown that wages in industries characterized by higher rates of technological change are higher. In addition, there is evidence that skill-biased technological change is responsible for the dramatic increase in the earnings of more educated workers relative to less educated workers that took place during the 1980s. In this paper, we match a variety of industry-level measures of technological change to a panel of young workers, observed between 1979 and 1993 (NLSY), and examine the role played by observed and unobserved heterogeneity in explaining the positive relationships between technological change and wages and between technological change and the education premium. We find that the wage premium associated with technological change is primarily due to the sorting of more able workers into those industries, and this premium is unrelated to any sorting based on gender or race. In addition, the education premium associated with technological change is the result of a greater demand for the innate ability or other unobserved characteristics of more educated workers.

JEL Classification: J31

Suggested Citation

Bartel, Ann P. and Sicherman, Nachum, Technological Change and Wages: An Interindustry Analysis. Journal of Political Economy, Vol. 107, No. 2, April 1999. Available at SSRN: https://ssrn.com/abstract=151745

Ann P. Bartel

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Nachum Sicherman (Contact Author)

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States
212-854-4464 (Phone)
212-316-9355 (Fax)

IZA Institute of Labor Economics

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

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