The Korean Economic Review
Technology Adoption and Skill Premium in the Knowledge Economy
Sang-Chul Yoon (Dankook University)Year 2011Vol. 27No. 2
This paper introduces an indirect utility function with non-constant expenditure shares to analyze how technology adoption and skill premium are linked in the knowledge economy. The model shows that if and only if the technology is “general purpose technology” (GPT), technology adoption increases the skill premium in spite of the relative price decline of modern goods that are skill-intensive.