Economic growth and economic development 690

Introduction to Modern Economic Growth such as the factory system and the major spinning and weaving innovations, were skill-replacing rather than skill-complementary Thus, in summary, we have the following stylized facts: (1) Secular skill-biased technological change increasing the demand for skills throughout the 20th century (2) Possible acceleration in skill-biased technological change over the past 25 years (3) A range of important skill-replacing technologies during the 19th century The current model, in particular, Propositions 15.3 and 15.4, gives us a way to think about these issues In particular, when σ > 2, the long-run (endogenoustechnology) relationship between the relative supply of skills and the skill premium is positive With an upward-sloping relative demand curve, or simply with the degree of skill bias endogenized, we have a natural explanation for all of the patterns mentioned above (1) According to Propositions 15.3 and 15.4, the increase in the number of skilled workers that has taken place throughout the 20th century should cause steady skill-biased technical change Therefore, models of directed technological change offer a natural explanation for the secular skill-biased technological developments of the past century (2) Acceleration in the increase in the number of skilled workers over the past 25 years, shown in Figure 15.1, should induce an acceleration in skill-biased technological change We will also discuss below how this class of models might account for the dynamics of factor prices in the face of endogenously changing technologies (3) Can the framework also explain the prevalence of skill-replacing/laborbiased technological change in the late 18th and 19th centuries? While we know less about both changes in relative supplies and technological developments during these historical periods, available evidence suggests that there were large increases in the number of unskilled workers available to be employed in the factories during this time periods Bairoch (1988, p 676