Machines and machinists: Capital-skill complementarity from an international trade perspective
AbstractWe estimate the effect of imported machines on the wages of machine operators utilizing Hungarian linked employer-employee data. We infer exposure to imported machines from detailed trade statistics of the firm and the occupation description of the worker. We find that workers exposed to imported machines earn about 8 percent higher wages than other machine operators at the same firm. When we proxy for unobserved worker characteristics, we find a significant 3 percent wage premium, suggesting that the relationship is causal. The return to schooling is also higher on imported machines. We build a simple matching model consistent with these findings. Our findings suggest that machine imports can be an important channel through which skill-biased technical change reaches less developed and emerging economies.
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Bibliographic InfoPaper provided by Center for Firms in the Global Economy in its series CeFiG Working Papers with number 13.
Date of creation: 25 Mar 2011
Date of revision: 25 Mar 2011
Other versions of this item:
- Csillag, Márton & Koren, Miklós, 2011. "Machines and machinists: Capital-skill complementarity from an international trade perspective," CEPR Discussion Papers 8317, C.E.P.R. Discussion Papers.
- Miklos Koren & Marton Csillag, 2011. "Machines and machinists: Capital-Skill Complementarity from an International Trade Perspective," IEHAS Discussion Papers 1114, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
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