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One of the most popular explanations of the increased wage inequality that has occurred since the late 1970s is that technological change has resulted in a downward shift in the demand for low-skill workers. Such a pattern is also alleged to account for the growth in racial inequality in wages that has been observed over the same period. Most studies of skill biased technological change use broad, supply-side data sources with only shallow data on technology and skills. As a consequence, these studies suffer from overly simple notions of technological change, poor measures of skill, or both. While such studies attempt to simulate a demand-side shift in the need for skills, because of the problem of self-selection of individuals into jobs that use the technology, it is questionable whether these studies can ever isolate the effects of technology per se. In this paper, we solve these conceptual and empirical problems in the context of a case study of the retooling of a food processing plant. Using a unique, longitudinal, multi-method design, we study the nature of the technological change, the changes in job requirements, and the mechanisms by which the technological changes affect the wage
Roberto M. Fernandez (Sat,) studied this question.