Analysing the impacts of technological development and trade on the skill premium in Hungary.

The difference between the wages of skilled and unskilled labour has substantially increased in Hungary since the beginning of the economic transition. Evidence of an increasing skill premium in developed countries since the late 1960s has come from a number of studies. The two main explanations offered in international literature for the increasing difference between skilled and unskilled wages are technological development and increasing trade. This study aims to examine how these two factors have affected the evolution of the skill premium in Hungary over the past two decades.