ABSTRACT
The evolution of the wage structure reflects a race between the growth in the demand for skills driven by technological advances and the growth in the supply of skills driven by demographic change, educational investment choices, and immigration. The increase in inequality was more all-encompassing than a widening between different education levels or occupational groups. Individuals with more education and higher innate abilities will be more able to grasp new and complicated tools. The central idea concerning the role of technology in affecting inequality is that certain technologies are difficult for workers and consumers to master. The evidence that skill-biased technological change has been ongoing for at least the last half century begins with a pioneering article by Zvi Griliches, who found a substantial degree of capital-skill complementarity in US manufacturing during the 1950s. The relative demand for skill would then rise even if there had been no technological change.
