Task

This topic requires you to outline the theory behind the idea that skill-biased technical change is the main explanation for increasing wage inequality in developed countries. Then you need to discuss whether there is any empirical evidence to support this theory.   

You should start from the textbooks but the papers by Autor et al. and Machin on the reading list should also be used in your answer.  In particular section III of Autor et al. gives a good summary of the relationship between computer use and the demand for skilled workers and you should summarise the empirical evidence presented in table IV.  Also summarise sections IV and VI.  What are the regression results intended to investigate and what are the key conclusions? 

A counterargument to the SBTC view is that the use of pencils also seems to be associated with higher earnings.  What is the essence of this argument?

End your topic with an evaluation of how successfully the SBTC view explains rising inequality.