Abstract
This chapter reviews the theory and broad empirical evidence of how skill-biased technical change, structural change, and development interact with each other, with the ultimate aim to derive conclusions about inequality related to how different skills are rewarded in the labor market. It is argued that the adoption and adaptation of foreign knowledge leads to structural change along the development path. The analysis also shows that sectors differ very much in terms of their skill intensity, which will likely lead to a changing role of skill-biased technical change over the development path. In particular, technical change biased in favor of high- and medium-skilled labor plays an important role in the early stages of development (roughly until middle-income level). After middle-income levels, biased technical change is overshadowed by an increasing supply of medium- and high-skilled labor. This implies that until about middle-income level, inequality between skill levels increases and after middle-income level, the skill premiums decline, thus leading to more equality in the labor market. This suggests that education plays a role both as a development policy and as a form of social protection policy (the latter mainly during later stages of the development process).
This is a preview of subscription content, log in via an institution to check access.
References
Abramovitz MA (1986) Catching up, forging ahead, and falling behind. J Econ Hist 46:385–406
Abramovitz MA (1989) Thinking about growth and other essays on economic growth and welfare. Cambridge University Press, Cambridge
Acemoglu D (2000) Technical change, inequality and the labor market. NBER working paper no. 7800. NBER, Cambridge, MA
Acemoglu D, Autor D (2011) Skills, tasks and technologies: implications for employment and earnings. In: Card D, Ashenfelter O (eds) Handbook of labor economics, vol 4b. Elsevier, Amsterdam, pp 1043–1171
Alvaredo F, Chancel L, Piketty T, Saez E, Zucman G (2017) World inequality report 2018. World Inequality Lab. https://wir2018.wid.world/files/download/wir2018-full-report-english.pdf
Autor D, Dorn D (2013) The growth of low-skill service jobs and the polarization of the U.S. Labor Market. Am Econ Rev 103:1553–1597
Autor D, Levy F, Murnane RJ (2003) The skill content of recent technological change: an empirical exploration. Q J Econ 118:1279–1333
Chenery HB, Robinson S, Syrquin M (1986) Industrialisation and growth. A comparative study. Oxford University Press, Oxford
Fagerberg J (1994) Technology and international differences in economic growth: a comparative study. J Econ Lit XXXII:1147–1175
Foster-McGregor N, Verspagen B (2016) The role of structural change in the economic development of Asian economies. Asian Dev Rev 33:74–93
Foster-McGregor N, Nomaler Ö, Verspagen B, van Zon A (2019) Structural change, economic development and the labor market. In: Foster-McGregor N, Alcorta L, Szirmai A, Verspagen B (eds) New perspectives on structural change: causes and consequences of structural change in the global economy. Oxford University Press, Oxford
Freeman C (1987) Technology policy and economic performance: lessons from Japan. Pinter Publishing, London
Gerschenkron A (1962) Economic backwardness in historical perspective. Belknap Press of Harvard University Press, Cambridge, MA
Goos M, Manning A, Salomons A (2009) The polarization of the European labor market. Am Econ Rev Pap Proc 99:58–63
Jasso G (2015) Inequality analysis: overview. In: Wright JD (ed) International encyclopedia of the social & behavioral sciences, 2nd edn. Elsevier, Amsterdam, pp 885–893
Lee E, Vivarelli M (2006) The social impact of globalization in developing countries. Int Labor Rev 145:167–184
Matsuyama K (2009) Structural change in an interdependent world: a global view of manufacturing decline. J Eur Econ Assoc 7:478–486
Pasinetti L (1981) Structural change and economic growth – a theoretical essay on the dynamics of the wealth of the nations. Cambridge University Press, Cambridge
Robbins D (1996) HOS hits facts: facts win; evidence on trade and wages in the developing world. OECD technical paper 119. OECD, Paris
Robbins D, Gindling TH (1999) Trade liberalization and the relative wages for more-skilled workers in Costa Rica. Rev Dev Econ 3:140–154
Szirmai A (2015) Socio-economic development. Cambridge University Press, Cambridge
Tregenna F (2016) Deindustrialization and premature deindustrialization. In: Handbook of alternative theories of economic development. Edward Elgar, Cheltenham, pp 710–728
Verspagen B (1991) A new empirical approach to catching up or falling behind. Struct Chang Econ Dyn 2:359–380
Vivarelli M (2014) Innovation, employment and skills in advanced and developing countries: a survey of economic literature. J Econ Issues 48:123–154
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Section Editor information
Rights and permissions
Copyright information
© 2020 Springer Nature Switzerland AG
About this entry
Cite this entry
Nomaler, Ö., Verspagen, B., van Zon, A. (2020). The Role of Innovation in Structural Change, Economic Development, and the Labor Market. In: Zimmermann, K. (eds) Handbook of Labor, Human Resources and Population Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-57365-6_5-1
Download citation
DOI: https://doi.org/10.1007/978-3-319-57365-6_5-1
Received:
Accepted:
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-57365-6
Online ISBN: 978-3-319-57365-6
eBook Packages: Springer Reference Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences