The Supply of Skilled Labour and Skill-Biased Technological Progress

Michael Kiley

Economic Journal, 1999, vol. 109, issue 458, 708-24

Abstract: This paper presents a model in which the adoption of skill-biased or "unskilled-biased" technologies is endogenous. In this model of endogenous technology choice, an increase in the supply of skilled labour leads to a temporary fall in the skill premium, followed by an expanding gap between the wages of skilled and unskilled workers as technologies adjust towards the more skill-intensive mix appropriate for the greater skill of the workforce. The adjustment in the technology mix results in slower output growth along the transition path.

Date: 1999
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Working Paper: The supply of skilled labor and skill-based technological progress (1997)
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