Skill‐Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles

The recent rise in wage inequality is usually attributed to skill‐biased technical change (SBTC), associated with new computer technologies. We review the evidence for this hypothesis, focusing on the implications of SBTC for overall wage inequality and for changes in wage differentials between grou...

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Bibliographic Details
Published in:Journal of labor economics 2002-10, Vol.20 (4), p.733-783
Main Authors: Card, David, DiNardo, John E.
Format: Article
Language:English
Subjects:
Age groups
Computer technology
Computer use
Economic growth
Economic theory
Economics
Economists
GDP
Gross Domestic Product
Hypotheses
Income inequality
Industrial relations
Inequality
Information technology
Labor economics
Labor market
Men
Puzzles
Relative wages
Returns to education
Skilled workers
Skills
Standard deviation
Studies
Technological change
Technology
Technology adoption
Tobacco industry
Wage differential
Wage differentials
Wages
Wages & salaries
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Summary:The recent rise in wage inequality is usually attributed to skill‐biased technical change (SBTC), associated with new computer technologies. We review the evidence for this hypothesis, focusing on the implications of SBTC for overall wage inequality and for changes in wage differentials between groups. A key problem for the SBTC hypothesis is that wage inequality stabilized in the 1990s despite continuing advances in computer technology; SBTC also fails to explain the evolution of other dimensions of wage inequality, including the gender and racial wage gaps and the age gradient in the return to education.
ISSN:0734-306X
1537-5307
DOI:10.1086/342055