Skill-biased technological change ______ the demand for high-skilled workers, while the slowdown in the pace of educational advancement reduces the supply of skilled workers, resulting in relatively _____ wages for skilled workers.
A) increases; higher
B) increases; lower
C) decreases; higher
D) decreases; lower

Question

Quizplus · Accepted Answer

Skill-biased technological change increases the demand for high-skilled workers as new technologies are often implemented to replace routine manual labor, while tasks requiring more cognitive and analytical skills are left for human workers. This leads to an increase in the wages of high-skilled workers due to the increasing demand for their skills. At the same time, a slowdown in educational advancement reduces the supply of skilled workers, further increasing the wages for high-skilled workers. Hence, the answer is A: increases; higher.

Skill-Biased Technological Change ______ the Demand for High-Skilled Workers, While