Technical Change and the Relative Demand for Skilled Labor. Lawrence Katz, 2014, Book Chapter. “Skill-biased technical change has been a pervasive feature of the twentieth-century American economy Goldin and Katz 2008). At the ground level. technical change is frequently embodied in new capital goods, whose price relative to output or labor becomes cheaper over time. As the relative price of capital declines, more capital per worker is used, and capital “deepening” occurs. In the twentieth century, physical capital and skill have been shown to be relative complements so that capital deepening has increased the demand for skilled relative to…” Link