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Technical Change, Wages, and Employment in Semiconductor Manufacturing

Using case study data gathered between 1993 and 1996, the authors investigate how automation of information handling and materials handling affected employment distribution, skill acquisition, work activities, and compensation in 23 semiconductor plants in four countries. Information handling automation is skill-biased technical change, which leads to use of relatively more technicians and engineers. In the sample studied, it widened the skill gap across occupations, and coincided with higher initial wages for all employees and shorter career ladders for engineers. Materials handling automation also widened the skill gap, but coincided with employment of relatively more operators and with lower pay across all occupations. Although technological change widened the skill gap between occupations and was biased toward employment of high-skill workers in the sample, the authors do not find that it led to increased wage inequality in the semiconductor plants they examine.