From Socialism to Capitalism: Low-Skill-Biased Change in the Baltics during the Transition and Beyond

Abstract

How did technological upgrading in the Baltics during the transition from planned to market economy affect labour? Existing academic literature would imply a skill-biased or polarising effect. However, we find that the opposite is likely true—technological upgrading predominantly benefited lower skilled workers. This is explained by an abundance of lower skilled labour, which fostered the usage of less advanced technologies that such workers could utilise. This article contributes to the discussion on the relationship between technology and labour by highlighting that technological upgrading may lead to low-skill-biased change.

Keywords

• labour market
• (low-)skill-biased change
• polarisation
• technological upgrading
• transition