The effects of technological change on schooling and training human capital

This study investigates the differential effects of technological change on general human capital acquired through schooling and technology-specific human capital acquired through training based on a life-cycle human capital investment model. Using data from the National Longitudinal Survey of Youth 79 (1987–2003), I find that for both high-ability and low-ability individuals, the net effect of technological change on training human capital is obsolescence, whereas that on schooling human capital is an increase in productivity in spite of the obsolescence. This finding is consistent with the view that individuals with more schooling may enjoy an advantage under rapid technological change over those with less schooling. I also find that technological change exerts differential impacts on individuals with different ability levels, which provides support for the skill-biased technical change theory.