Skill-biased technological change, international trade and the wage structure

During the last two decades, the labour demand structure in Germany has experienced a decrease in the demand for the low skilled. Possible explanations for this trend are investigated in this study for West Germany (1994- 1997) using a unique linked employer-employee panel data set for Germany. Estimation results of the conditional labour demand for three different skill types indicate that the major part of the skill structure is determined by wages, while we have found only minor impacts of a skill-biased technological change and of international trade.