Technology and the Wage Structure

This paper reports direct evidence on how recent changes in technology are related to changes in wage differentials by schooling, experience, and gender. Wage differentials by industry in the full- year 1979 and 1989 Current Population Surveys are related to R&D intensity, usage of high-tech capital, recentness of technology, growth in total factor productivity, and growth of the capital-labor ratio. Returns to schooling are larger in industries that are intensive in R&D and high-tech capital. Technology variables account for 30 percent of the increase in the wage gap between college and high school graduates.