This study investigates whether capital-skill complementarity is the explanation for skill-biased technical change. For this to be the case, capital-skill complementarity must exist in the first place and, secondly, all technical change must be embodied in nature, i.e. embedded in new capital...

We construct a multi-layer model of skills, occupations, and sectors. Technological progress among middle-skill occupations raises the employment shares and relative wages of lower- and higher-skill occupations (horizontal polarization), and those of managers over workers (vertical...