TY - JOUR AU - Berman,Eli AU - Bound,John AU - Machin,Stephen TI - Implications of Skill-Biased Technological Change: International Evidence JF - National Bureau of Economic Research Working Paper Series VL - No. 6166 PY - 1997 Y2 - September 1997 UR - http://www.nber.org/papers/w6166 L1 - http://www.nber.org/papers/w6166.pdf N1 - Author contact info: Eli Berman Department of Economics, 508 University of California, San Diego 9500 Gilman Drive La Jolla, CA 92093 Tel: 858/534-2858 Fax: 858/534-7040 E-Mail: elib@ucsd.edu John Bound Department of Economics University of Michigan Ann Arbor, MI 48109-1220 Tel: 734/998-7149 Fax: 734/998-7415 E-Mail: jbound@umich.edu Stephen Machin London School of Economics Centre for Economic Performance Houghton Street London WC2A 2AE ENGLAND E-Mail: s.machin@ucl.ac.uk AB - Demand for less skilled workers decreased dramatically in the US and in other developed countries over the past two decades. We argue that pervasive skill-biased technological change rather than increased trade with the developing world is the principal culprit. The pervasiveness of this technological change is important for two reasons. First, it is an immediate and testable implication of technological change. Second, under standard assumptions, the more pervasive the skill-biased technological change the greater the increase in the embodied supply of less skilled workers and the greater the depressing effect on their relative wages through world goods prices. In contrast, in the Heckscher-Ohlin model with small open economies, the skill-bias of local technological changes does not affect wages. Thus, pervasiveness deals with a major criticism of skill-biased technological change as a cause. Testing the implications of pervasive, skill-biased technological change we find strong supporting evidence. First, across the OECD, most industries have increased the proportion of skilled workers employed despite rising or stable relative wages. Second, increases in demand for skills were concentrated in the same manufacturing industries in different developed countries. ER -