The Race between Technological Progress and Female Advancement: Changes in Gender and Skill Premia in OECD Countries

Abstract

In recent decades, the male-female wage gap has fallen, while the skilled-unskilled wage gap has risen in advanced countries. The rate of decline in the gender wage gap tends to be greater for unskilled than skilled workers, while the rate of increase in the skill wage gap tends to be greater for male than female workers. To account for these trends, we develop an aggregate production function extended to allow for gender-specific capital-skill complementarity, and estimate it using shift-share instruments and cross-country panel data from OECD countries. We confirm that ICT equipment is more complementary not only to skilled than unskilled workers but also to female than male workers. Our results show that changes in gender and skill premia can be explained in terms of the race between progress in ICT and advances in educational attainment and female employment. In addition, we examine the implications of gender-specific capital-skill complementarity for changes in the labor share of income