Knowledge Spillovers and Wage Inequality: An Empirical Investigation of Knowledge-Skill Complementarity

Abstract

This paper examines the importance of knowledge-skill complementarity in the process of contemporary economic growth. By analyzing Dutch manufacturing and carrying out an extensive spillover and wage inequality analysis, it is shown that knowledge-intensive sectors pay their high-skilled workers a relatively higher wage in the form of a wage premium, which is defined as the sector bias of technical change.research and development ;