This essay discusses the effect of technical change on wage inequality. I argue that the behavior of wages and returns to schooling indicates that technical change has been skill-biased during the past sixty years. Furthermore, the recent increase in inequality is most likely due to an acceleration in skill bias. In contrast to twentiethcentury developments, much of thr technical change during the early nineteenth century appears to be skill-replacing. I suggest that this is because the increased supply of unskilled workers in the English cities made the introduction of these technologies profitable. On the other hand, the twentieth century has been characterized by skillbiased technical change because the rapid increase in the supply of skilled workers has induced the development of skill-complementary technologies. The recent acceleration in skill bias is in turn likely to have been a response to the acceleration in the supply of skills during the past several decades.

portion of this paper may be reproduced without permission of the authors. Discussion papers are research materials circulated by their authors for purposes of information and discussion. They have not necessarily undergone formal peer review or editorial treatment. Environmental and Technology Policies for Climate Mitigation

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Is innovation primarily determined by scientific constraints and motivated by past scientific discoveries? Or does innovation respond to profit incentives? In this paper, we develop a simple model linking innovation to potential market size, and show that under a variety of circumstances, a greater market size for a particular product, which implies greater profitability from sales, spurs faster innovation for this product. We provide evidence for this hypothesis from the pharmaceutical industry by looking at changes in the potential market size for various drug categories driven by U.S. demographic changes. We find that a 1 percent increase in the potential market size for a drug category leads to a 4 to 7.5 percent increase in the number of new drugs in that category. This result is generally robust to using different estimation strategies, adopting different classifications of drugs into various categories, and controlling for pre-existing trends.

portion of this paper may be reproduced without permission of the authors. Discussion papers are research materials circulated by their authors for purposes of information and discussion. They have not necessarily undergone formal peer review or editorial treatment. Information Programs for Technology Adoption: The Case of Energy-Efficiency Audits

The relationship between technological change and environmental policy has received increasing attention from scholars and policy makers alike over the past ten years. This is partly because the environmental impacts of social activity are significantly affected by technological change, and partly because environmental policy interventions themselves create new constraints and incentives that affect the process of technological developments. Our central purpose in this article is to provide environmental economists with a useful guide to research on technological change and the analytical tools that can be used to explore further the interaction between technology and the environment. In Part 1 of the article, we provide an overview of analytical frameworks for investigating the economics of technological change, highlighting key issues for the researcher. In Part 2, we turn our attention to theoretical analysis of the effects of environmental policy on technological change, and in Part 3, we focus on issues related to the empirical analysis of technology innovation and diffusion. Finally, we conclude in Part 4 with some additional suggestions for research

portion of this paper may be reproduced without permission of the authors. Discussion papers are research materials circulated by their authors for purposes of information and discussion. They have not necessarily undergone formal peer review or editorial treatment.. Technological Change and the Environment

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...........................................................................................................................................iv 1. Introduction..................................................................................................................................1 2. A Model of Cost Heterogeneity and Policy Choice.....................................................................6 2.1 A Model of Heterogeneous Costs......................................................................................... 6 2.2 Alternative Policies for Emission Allocation....................................................................... 7 2.2.1 Cost of a Uniform Emission Rate Standard ............................................................... 7 2.2.2 Cost of a Uniform Percentage Reduction Standard ................................................... 9 2.2.3 Cost of a Market-Based Policy Instrument ................................................................ 9 2.3 The...

This paper analyzes the impact of environmental policy instruments on the choice of pollution control techniques. I ¯rst recast the existing theoretical model of pollution abatement technology choice. Previous studies have found that the cost savings to a ¯rm that adopts a technical innovation in pollution control are greater under a market-based instrument, such as an emissions tax or tradeable permit system, than under a command-and-control instrument such as an emissions rate standard. I show that this result is more general than previously recognized: in particular, it holds whether the new technique is more capital intensive (as in previous models) or less capital intensive. Hence, the choice of technique by ¯rms should be more responsive to abatement costs under market-based instruments. I then provide an empirical test of the theoretical predictions, using data from sulfur dioxide regulation of coal-¯red electric power plants. My principal ¯nding is that electric generating units sub ject to a tradeable permits regime were indeed more responsive to abatement costs than units under an emissions rate standard. That is, a given change in the average cost of scrubbing or coal-switching had a greater impact on the probability of scrubbing for units under the market-based regime. I also ¯nd that long-term coal contracts, regional location, and utility ownership class had signi¯cant e®ects on the choice of abatement technique. 1