Technology, wages, and skill shortages: Evidence from UK micro data

Jonathan Haskel, Christopher Martin

Research output: Contribution to journalArticle

14 Citations (Scopus)

Abstract

Why have skill shortages continue to persist despite increases in training and the skill levels of the workforce? We argue that technical progress has raised the demand for skilled labour to match the observed increase in supply. We provide econometric evidence in support of this hypothesis, showing that skill shortages are higher for establishments that use advanced technology in the production process. We also provide econometric evidence that hiring difficulties are inversely related to the relative wage, as theory would suggest. Our results have clear implications for policy. If technological progress continues to be skill biased, policies that address skills deficiencies will only be successful if they produce a continual, rather than a temporary, increase in levels of skills among the workforce.

Original languageEnglish
Pages (from-to)642-658
Number of pages17
JournalOxford Economic Papers
Volume53
Issue number4
DOIs
Publication statusPublished - 1 Oct 2001

ASJC Scopus subject areas

  • Economics and Econometrics

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