@techreport{NBERw13057,
 title = "Trade, Knowledge, and the Industrial Revolution",
 author = "Kevin H. O'Rourke and Ahmed S. Rahman and Alan M. Taylor",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "13057",
 year = "2007",
 month = "April",
 URL = "http://www.nber.org/papers/w13057",
 abstract = {Technological change was unskilled-labor-biased during the early Industrial Revolution of the late eighteenth and early nineteenth centuries, but is skill-biased today. This fact is not embedded in extant unified growth models. We develop a model of the transition to sustained economic growth which can endogenously account for both these facts, by allowing the factor bias of technological innovations to reflect the profit-maximising decisions of innovators. Endowments dictated that the initial stages of the Industrial Revolution be unskilled-labor biased. The transition to skill-biased technological change was due to a growth in "Baconian knowledge" and international trade. Simulations show that the model does a good job of tracking reality, at least until the mass education reforms of the  late nineteenth century.},
}