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...

Technology is the driver of labor allocation across sectors and occupations. Is the impact of technological change on developing countries similar to its impact on developed countries? Will developing countries follow the same development path that developed economies have taken? Our approach...