ABSTRACT
According to a widely held view, there is a straightforward explanation for the recent rise in income inequality. Since late-1970s the labour markets of industrialised countries have experienced a shift in demand away from unskilled labour. Some researchers have emphasised the bias against unskilled labour associated with technological progress. For instance, Krugman (1994) observed that
it is surely hard not to suspect that the dramatic progress in information and communication technology over the past two decades has somehow played a central role in the increased premium on skill, and perhaps in the growth of European unemployment.
(p. 71)