Skill-based Technological Change Impact

Skill-based Technological Change (SBTC) refers to the way advancements in technology increase the demand for skilled workers while reducing the need for unskilled labor. As new technologies emerge, jobs that require higher education and specialized skills grow, while those that do not often decline. This shift leads to increased income for skilled workers and stagnation or decline in wages for unskilled workers, widening the gap between different groups in the labor market. As a result, economic inequalities can grow, with fewer opportunities for lower-skilled individuals to advance or find well-paying jobs.