Are Skilled and Unskilled Labour Complements or Substitutes?

Would more skilled labour lower demand for those who §remain unskilled? Could cheaper capital decrease §unskilled employment? The world is experiencing §skill-biased shifts in labour demand, which makes it §particularly difficult for South Africa's new §democracy to improve conditions for its unskilled §and unemployed workforce. Governments see §training/education as the key to countering this §trend, but what happens to those who remain §unskilled? This book asks if more skills will raise §output such that demand for unskilled labour also §rises, or if the skilled will simply replace them. §It introduces the possibility of increased skill §supply stimulating the import of skill-biased §technologies, which could exacerbate skill-biased §demand shifts. Some segments of society call for §lower interest rates to expand employment, but this §book argues cheaper capital would replace labour and §raise unemployment. Practitioners concerned with §South Africa's high unemployment should consult this §book. Economists working on employment issues could §use this book to think about whether employment-§oriented policies may have unintended consequences §in their own developing countries.