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Title: Technical Change and the Relative Demand for Skilled Labor: The United States in Historical Perspective

Citation Type: Conference Paper

Publication Year: 2012

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Abstract: Skill-biased technical change has been a pervasive feature of the twentieth century American economy (Goldin and Katz 2008). At the ground level, technical change is frequently embodied in new capital goods, whose price relative to output or labor becomes cheaper over time. As the relative price of capital declines, more capital per worker is used, and capital deepening occurs. In the twentieth century, physical capital and skill have been shown to be relative complements so that capital deepening has increased the demand for skilled relative to unskilled labor (Griliches 1969). Technology-skill complementarity has also been widespread over the past century with new technologies from those associated with the electricity revolution in the early twentieth century to the computer revolution in late twentieth century being relative complements with human capital (Goldin and Katz 1998; Autor, Katz, and Krueger 1998). Goldin and Katz (2008, p. 297, Table 8.1), using educational attainment as a proxy for skill, show that the demand for skilled labor greatly outpaced the demand for unskilled labor in every decade of the twentieth century, with the possible exception of the 1940s.

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Authors: Margo, Robert A.; Katz, Lawrence

Conference Name: NBER-Spencer Conference on Human Capital and History: The American Record

Publisher Location: Cambridge MA

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Other

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