Oxford Review of Economic Policy volume 16, issue 3, P23-41 2000 DOI: 10.1093/oxrep/16.3.23 View full text
Abstract: We estimate the extent of factor bias in technical changes consistent with observed changes in skill premia. To control for the effects of expanded trade on wages we use a structural model with multiple regions and comparative static analysis. Two alternative biased technical change stories emerge: skill enhancement when capital and skill are substitutes and capital enhancement when capital and skill are complements. These imply different underlying technical change processes and macroeconomic behaviour in res…
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