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Technological revolutions

By Francesco Caselli

Abstract

In skill-biased (deskilling) technological revolutions, learning investments required by new machines are greater (smaller) than those required by preexisting machines. Skill-biased (deskilling) revolutions trigger reallocations of capital from slow- (fast-) to fast- (slow-) learning workers, thereby reducing the relative and absolute wages of the former. The model of skill-biased (deskilling) revolutions provides insight into developments since the mid-1970s (in the 1910s). The empirical work documents a large increase in the interindustry dispersion of capital-labor ratios since 1975. Changes in industry capital intensity are related to the skill composition of the labor force

Topics: HB Economic Theory
Publisher: American Economic Association
Year: 1999
DOI identifier: 10.1257/aer.89.1.78
OAI identifier: oai:eprints.lse.ac.uk:3915
Provided by: LSE Research Online
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