Trade Openness and the Demand for Skills: Evidence from Turkish Microdata
AbstractIn this paper we report evidence on the relationship between trade openness, technology adoption and relative demand for skilled labour in the Turkish manufacturing sector, using firm-level data over the period 1980-2001. In a dynamic panel data setting using a unique database of 17,462 firms, we estimate an augmented cost share equation whereby the wage bill share of skilled workers in a given firm is related to international exposure and technology adoption. Overall, results suggest that trade openness and technology play a key role in shifting the demand for labour towards more skilled workers within each firm. Technology-related variables (domestic R&D expenditures and technological transfer from abroad) are positive and significantly related to skill upgrading, as are the involvement of foreign capital in a firm's ownership and the propensity to export. Moreover, firms belonging to those sectors that most raised their imported inputs also experienced a higher increase in the labour cost share of skilled workers. This finding is consistent with the idea that imports by a middle-income country imply a transfer of new technologies that are more skill-intensive than those previously in use in domestic markets. This idea is reinforced by the finding that only imported inputs from industrialised countries − where the potential for innovation diffusion comes from - enter the estimated regression significantly.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3887.
Length: 31 pages
Date of creation: Dec 2008
Date of revision:
Publication status: published in: Labour Economics, 2011, 18 (S1), S60-S70
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Find related papers by JEL classification:
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-03 (All new papers)
- NEP-ARA-2009-01-03 (MENA - Middle East & North Africa)
- NEP-CWA-2009-01-03 (Central & Western Asia)
- NEP-HRM-2009-01-03 (Human Capital & Human Resource Management)
- NEP-LAB-2009-01-03 (Labour Economics)
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- Bruno Cesar Araujo & Francesco Bogliacino & Marco Vivarelli, 2009.
"The Role of "Skill enhancing Trade" in Brazil: Some Evidence from Microdata,"
Jena Economic Research Papers
2009-041, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
- Bruno César Araújo & Marco Vivarelli & FrancescoBogliacino, 2011. "The Role Of Skill Enhancing Trade In Brazil: Some Evidence From Microdata," Anais do XXXVII Encontro Nacional de Economia [Proceedings of the 37th Brazilian Economics Meeting] 143, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
- Araújo, Bruno Cesar & Bogliacino, Francesco & Vivarelli, Marco, 2009. "The Role of "Skill Enhancing Trade" in Brazil: Some Evidence from Microdata," IZA Discussion Papers 4213, Institute for the Study of Labor (IZA).
- Bruno Cesar Araújo & Francesco Bogliacino & Marco Vivarelli, 2011. "Technology, trade and skills in Brazil: Some evidence from microdata," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1171, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
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