Technological Change and the Demand for Skills in the 1980s: Does Skill Mismatch Explain the Growth of Low Earnings?

David Howell ()

Macroeconomics from University Library of Munich, Germany

Abstract: The sharp decline in real wages and the drop in relative earnings among low–skilled workers generally is attributed to structural shifts in the labor force induced by technological change that has limited the demand for workers with low skill levels. While the claim that the cause of reduced earnings is a decline in the demand for low–skilled workers is common, the statistical evidence backing this assertion has not established such a link. In attempting to explain the reasons underlying the 15–year decline in earnings, David R. Howell asserts that, in fact, the skill mismatch does not adequately explain the problems faced by low–skill workers: If technological change did indeed reduce the demand for lower skilled workers, there should have been a corresponding decline in the employment share of these workers as well as a steadily rising rate of joblessness among them. Instead, dramatic growth in the demand for low–wage workers took place during the past 15 years, while their wages continued on a downward path. In an examination of employment trends among the nonsupervisory workforce, Howell finds that there was a rise in low–wage jobs in both goods and service industries. In fact, "the last decade and a half has made it abundantly clear that the choice concerning the nonsupervisory workforce is not limited to high skills or low wages," but instead "toward gradually higher skills with dramatically lower wages." The case study literature indicates that technological change did not alter the skill distribution among jobs, but that changes in job opportunities and skill level requirements varied by firm, industry, and occupation.

JEL-codes: E (search for similar items in EconPapers)
Pages: 41 pages
Date: 1999-07-08
Note: Type of Document - Acrobat PDF; prepared on IBM PC; to print on PostScript; pages: 41; figures: included
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://econwpa.ub.uni-muenchen.de/econ-wp/mac/papers/9907/9907003.pdf (application/pdf)

Related works:
Working Paper: Technological Change and the Demand for Skills in the 1980s: Does Skill Mismatch Explain the Growth of Low Earnings? (1993)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:9907003

Access Statistics for this paper

More papers in Macroeconomics from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ( this e-mail address is bad, please contact ).