Endogenous Technological Change and Wage Inequality
AbstractAlthough microeconomic studies find a positive relationship between R&D and skill premia, much of the recent rise in U.S. wage inequality was accompanied by slowing labor-productivity growth and relatively slow introduction of new technologies. These conflicting observations are consistent with the effects of a skewed distribution of 'absorptive capacities'--the rate at which technology-specific skills can be acquired--in a model of endogenous technological change. The framework is used to assess whether the productivity slowdown and the rise in wage inequality can be jointly accounted for by the contemporaneous decline in the growth rate of labor quality.
CitationLloyd-Ellis, Huw. 1999. "Endogenous Technological Change and Wage Inequality." American Economic Review, 89 (1): 47-77. DOI: 10.1257/aer.89.1.47
- J31 Wage Level and Structure; Wage Differentials
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
- O33 Technological Change: Choices and Consequences; Diffusion Processes