The Supply of Skilled Labor and Skill-Biased Technological Progress

Board of Governors of the Federal Reserve System Finance and Econ. Disc. Series 97-45

18 Pages Posted: 16 Dec 1997

See all articles by Michael T. Kiley

Michael T. Kiley

Board of Governors of the Federal Reserve System

Date Written: August 15, 1997

Abstract

Rising inequality in the relative wages of skilled and unskilled labor is often attributed to skill-biased technological progress. This paper presents a model in which the adoption of skill-biased or "unskilled-biased" technologies is endogenous. Conventional wisdom states that an increase in the supply of skilled labor lowers the relative wage of skilled to unskilled labor. In this paper, an increase in the supply of skilled labor leads to temporary stagnation in the wages of unskilled workers and an expanding gap between the wages of skilled and unskilled workers through an acceleration of skill-biased technological change.

JEL Classification: O30, J31, O40

Suggested Citation

Kiley, Michael T., The Supply of Skilled Labor and Skill-Biased Technological Progress (August 15, 1997). Board of Governors of the Federal Reserve System Finance and Econ. Disc. Series 97-45. Available at SSRN: https://ssrn.com/abstract=44604 or http://dx.doi.org/10.2139/ssrn.44604

Michael T. Kiley (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th and C Streets, NW
Washington, DC 20551
United States
202-452-2448 (Phone)
202-452-5296 (Fax)

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