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Skill-biased technological change, international trade and the wage structure

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  • Arnd Kölling

    ()
    (Institute for Employment Research (IAB))

  • Thorsten Schank

    ()
    (Institute for Employment Research (IAB))

Abstract

During the last two decades, the labour demand structure in Germany and other OECD countries has experienced a decrease in the demand for low skilled and a rise in the demand for highly skilled employees. The adoption of modern technologies in the production process as well as the growth of international trade are often regarded as the main driving factors behind this change. On the other hand, it is often argued that a more flexible wage structure could counteract the falling demand for the unskilled. This study investigates these hypothesis for West Germany, 1994-1997, using the LIAB, a unique German linked employer-employee panel data set, which combines information from the German employment statistics and the IAB establishment panel. Employing a Generalised Leontief cost function and controlling for unobserved plant heterogeneity, the demand for three different skill types of labour is estimated by the SUR-Method. The results show that the major part of the skill structure is determined by wages, while we have found only minor impacts of a skill-biased technological change, of international trade and of short-run effects due to the business cycle.

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Bibliographic Info

Paper provided by International Conferences on Panel Data in its series 10th International Conference on Panel Data, Berlin, July 5-6, 2002 with number B1-3.

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Date of creation: Feb 2002
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Handle: RePEc:cpd:pd2002:b1-3

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Keywords: labour demand; substitution; skill-biased technological change; labour hoarding; international trade; linked employer-employee data;

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References

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  1. Martin Falk & Bertrand Koebel, 2001. "A dynamic heterogeneous labour demand model for German manufacturing," Applied Economics, Taylor & Francis Journals, vol. 33(3), pages 339-348.
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  8. Bound, John & Johnson, George, 1992. "Changes in the Structure of Wages in the 1980's: An Evaluation of Alternative Explanations," American Economic Review, American Economic Association, vol. 82(3), pages 371-92, June.
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Citations

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Cited by:
  1. Carsten Ochsen & Heinz Welsch, 2005. "Technology, trade, and income distribution in West Germany: A factor-share analysis, 1976-1994," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 321-345, November.
  2. repec:iab:iabmit:v:35:i:4:p:506-522 is not listed on IDEAS
  3. John T. Addison & Lutz Bellmann & Thorsten Schank & Paulino Teixeira, 2005. "The Demand for Labor: An Analysis Using Matched Employer-Employee Data from the German LIAB. Will the High Unskilled Worker Own-Wage Elasticity Please Stand Up?," GEMF Working Papers 2005-13, GEMF - Faculdade de Economia, Universidade de Coimbra.
  4. Carsten Ochsen, 2006. "Zukunft der Arbeit und Arbeit der Zukunft in Deutschland," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(2), pages 173-193, 05.
  5. Lurweg, Maren, 2010. "Perceived job insecurity, unemployment risk and international trade: A micro-level analysis of employees in German service industries," CAWM Discussion Papers 32, Center of Applied Economic Research Münster (CAWM), University of Münster.
  6. repec:iab:iabmit:v:36:i:3:p:257-270 is not listed on IDEAS
  7. Ljubica Nedelkoska & Simon Wiederhold, 2010. "Technology, outsourcing, and the demand for heterogeneous labor: Exploring the industry dimension," Jena Economic Research Papers 2010-052, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.

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