Capital-Skill Complementarity: Evidence from Manufacturing Industries in Ghana
AbstractUsing U.S. manufacturing data, Griliches (1969) found evidence suggesting that capital equipment was more substitutable for unskilled than skilled labor. Griliches formulated this finding as the capital-skill complementarity hypothesis. The purpose of this study is to determine whether the capital-skill complementarity framework holds for Ghana manufacturing plants in industry and aggregate level. We use an unbalanced panel of plant-level data for manufacturing firms in Ghana during the 1991 and 1997 in four industries (food-bakery, textiles-garments, wood-furniture and metal-machinery). Our findings suggest that capital-skill complementarity holds in aggregate level and wood-furniture sector in Ghana. However, we reject the capital-skill complementarity hypothesis for food-bakery, textile-garment and metal-machinery sectors.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4674.
Length: 23 pages
Date of creation: Dec 2009
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Find related papers by JEL classification:
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
- O55 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Africa
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- NEP-DEV-2010-01-23 (Development)
- NEP-EFF-2010-01-23 (Efficiency & Productivity)
- NEP-HRM-2010-01-23 (Human Capital & Human Resource Management)
- NEP-LAB-2010-01-23 (Labour Economics)
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