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Chapter 25 Skill Based Technology Change in the New Economy This chapter considers changes in the skill structures of labor demand. It places particular attention on changes in the relative wages and employment of more skilled–educated workers as compared to their less skilled–educated counterparts. The chapter discusses the main explanations for why relative demand has shifted in favor of the more skilled, arguing that skill-biased technical change has been an important factor behind the observed changes in the organization of work in the new economy. It also reviews some of the technology–trade debate, arguing that trade-based explanations are difficult to maintain. It concludes by discussing some of the possible policy implications that run alongside these changes in labor market structure. |