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Article: Implications of the capital-embodiment revolution for directed R&D and wage inequality.
- Article from:
- Economic Quarterly
- Article date:
- September 22, 2003
- Author:
CopyrightCOPYRIGHT 2003 Federal Reserve Bank of Richmond. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Wage inequality has increased dramatically in the United States since the late 1970s. In particular, we have witnessed growing wage differences between groups defined by observed skills such as education or experience. For example, the college premium--that is, the percentage difference between the average wages of college-educated and non-college-educated workers--increased by a factor of four. Since at the same time the relative supply of college-educated workers increased, we would have expected to see a fall of the college premium. The fact that a decrease did not occur suggests that something else changed too. A natural candidate is technical change that has been ...