Evidence Of Technological Change

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the multinational firms. Thus, if technological change is an important determinant of relative demand shifts, one would expect to observe patterns in other industrialized countries similar to those in the United States. Some of the recent studies report results for a variety of old industrialized (OECD) countries that are indeed consistent with the U.S. results (Collechia and Papaconstantinou, 1996; Machin, Ryan and Van Reenan, 1996). These countries vary a great deal with respect to changes in their situations with respect to trade, labor market institutions (like the importance of trade unions), and unemployment. Obviously, the relative demand for skilled labor in each of them is rising rapidly. In my view, it is the fairly strong evidence in favor of the wage inequality and technological change story.
A factor that is often cited as the specific issue of the post-1980 is the widespread adoption of computer technology throughout the economy. As mentioned above, the ...

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in the educational distribution. This fact is troubling for any explanation of the rise in income inequality that focuses on skill-biased technological change. After all, if there was so much technological change, why didn’t it cause high average real wage increases, rather than the historically unprecedented stagnation of wages?
An answer to this question is that the effect of technological change on the average real wage rate depends on which kind of change occurs. Technological change that is neutral with respect to labor skills—that increases the efficiency of both skilled and unskilled labor by the same proportion—will result (after the adjustment of the aggregate capital ...

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