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Technological Change and Skill-based Employment Disparities: Evidence from Turkey

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  • Ilina Srour

    ()
    (Universita Cattolica del Sacro Cuore, Milano)

  • Marco Vivarelli

    ()
    (Università Cattolica del Sacro Cuore, Piacenza)

  • Erol Taymaz

    ()
    (Department of Economics, Middle East Technical University, Ankara)

Abstract

This paper explores the causes of skill-based employment differentials within the Turkish manufacturing sector over the period 1980-2001. Turkey is taken as an example of a developing economy that, in that period, had been technologically advancing and becoming increasingly integrated with the world market. The empirical analysis is performed at firm level within a dynamic framework using a two-equation model that depicts the employment trends for skilled and unskilled workers separately. In particular, the System Generalized Method of Moments (GMM-SYS) procedure is applied to a panel dataset comprised of 17,462 firms. Our results confirm the theoretical expectation that developing countries face the phenomena of skill-biased technological change and skill-enhancing technology import, both leading to increasing the employment gap between skilled and unskilled workers. In particular, strong evidence of a relative skill bias emerges: both domestic and imported technologies increase the demand for skilled labor 5 to 6 times more than the corresponding demand for the unskilled labor. Finally, “learning by export” also appears to have a skill biased impact, but to a lesser extent.

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Bibliographic Info

Paper provided by Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE) in its series DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali with number dises1393.

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Length: 23 pages
Date of creation: May 2013
Date of revision:
Publication status: Published in Review of Economics
Handle: RePEc:ctc:serie2:dises1393

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Web page: http://www.unicatt.it/Dipartimenti/DISES
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Keywords: Skill-biased technological change; technology transfer; panel data; GMM-SYS;

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