Skill-Biased Structural Change

Abstract Using a broad panel of advanced economies, we document that increases in GDP per capita are associated with systematic shift the composition value added to sectors intensive high-skill labour, process label as skill-biased structural change. It follows further development these economies leads an increase relative demand for skilled labour. We develop quantitative two-sector model this laboratory assess sources rise skill premium U.S. and set ten other over period 1977 2005. For U.S., find sector-specific neutral component technical change accounts 18–24% overall due change, mechanism through which affects is via