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Globalization and Employment: Imported Skill Biased Technological Change in Developing Countries

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  • Andrea Conte

    ()
    (Max Planck Institute of Economics Jena, Entrepreneurship, Growth and Public Policy Group)

  • Marco Vivarelli

Abstract

This paper discusses the impact of the international transfer of embodied technological change on the employment evolution of skills in a sample of low and middle income countries (LMICs). A large body of literature has already underlined the occurrence of widening wage and employment differentials between skilled and unskilled workers in high-income countries (HICs) (Katz and Autor, 1999). Such empirical evidence is consistent with both trade- and technology-based explanations while these competing theoretical frameworks predict opposite effects on within- country inequality in LMICs. Recent analytical advancements have found convergent elements between these two lines of research, especially in the prediction of the employment impact of technology transfer. However, a systematic lack of data in LMICs still hampers empirical research on the determinants of the witnessed increase in inequality in these economies. This paper provides a direct measure of technology transfer from HICs, that is from those economies which have already experienced the occurrence of skillbiased technological change, to LMICs. GMM techniques are applied to an original panel dataset comprising 28 manufacturing sectors for 23 countries over a decade. Econometric results provide direct robust evidence of the absolute skill-bias effect of technology import in LMICs which, therefore, represents an important determinant of the growing divide between skilled and unskilled workers in these countries.

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Bibliographic Info

Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2007-009.

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Date of creation: 22 Apr 2007
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Handle: RePEc:jrp:jrpwrp:2007-009

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Keywords: Skill Biased Technological Change; capital trade; GMM estimation; General Industrial Statistics; World Trade Analyzer;

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Cited by:
  1. Sami SAAFI & Fouzi SBOUI, 2011. "LES OPPORTUNITES DES INVESTISSEMENTS DIRECTS ETRANGERS LES OPPORTUNITES DES INVESTISSEMENTS DIRECTS ETRANGERS, DIFFUSION TECHNOLOGIQUE ET DEMANDE DE LA MAIN-D’OEUVRE PAR QUALIFICATION DES INDUSTRIES," Working Papers, Laboratoire de Recherche sur l'Industrie et l'Innovation. ULCO / Research Unit on Industry and Innovation 240, Laboratoire de Recherche sur l'Industrie et l'Innovation. ULCO / Research Unit on Industry and Innovation.
  2. Meschi, Elena & Vivarelli, Marco, 2007. "Globalization and Income Inequality," IZA Discussion Papers 2958, Institute for the Study of Labor (IZA).
  3. Meschi, Elena & Vivarelli, Marco, 2009. "Trade and Income Inequality in Developing Countries," World Development, Elsevier, Elsevier, vol. 37(2), pages 287-302, February.
  4. Elena Meschi & Erol Taymaz & Marco Vivarelli, 2010. "Trade, Technology And Skills: Evidence From Turkish Microdata," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE) dises1062, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  5. Facundo Alvaredo & Leonardo Gasparini, 2013. "Recent Trends in Inequality and Poverty in Developing Countries," CEDLAS, Working Papers, CEDLAS, Universidad Nacional de La Plata 0151, CEDLAS, Universidad Nacional de La Plata.
  6. Yen, Meng-Feng, 2013. "The Wage Premium and Market Structure: The Case of South Korea and Taiwan," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C., Agricultural and Applied Economics Association 151292, Agricultural and Applied Economics Association.
  7. Srour, Ilina & Taymaz, Erol & Vivarelli, Marco, 2013. "Skill-Biased Technological Change and Skill-Enhancing Trade in Turkey: Evidence from Longitudinal Microdata," IZA Discussion Papers 7320, Institute for the Study of Labor (IZA).
  8. Gianluca Grimalda & Marco Vivarelli, 2010. "Is inequality the price to pay for higher growth in middle-income countries?," Journal of Evolutionary Economics, Springer, Springer, vol. 20(2), pages 265-306, April.
  9. Nathalie Chusseau & Joel Hellier, 2012. "Inequality in emerging countries," Working Papers 256, ECINEQ, Society for the Study of Economic Inequality.
  10. Sami SAAFI, 2009. "Innovations technologiques, mobilité et demande de main-d’oeuvre qualifiée. Une analyse des industries tunisiennes (Technological innovations, mobility and skilled-labour deamnd : an analysis of t," Working Papers, Laboratoire de Recherche sur l'Industrie et l'Innovation. ULCO / Research Unit on Industry and Innovation 206, Laboratoire de Recherche sur l'Industrie et l'Innovation. ULCO / Research Unit on Industry and Innovation.
  11. MacDonald, Ronald & Majeed, Muhammad Tariq, 2010. "Distributional and Poverty Consequences of Globalization: A Dynamic Comparative Analysis for Developing Countries," SIRE Discussion Papers, Scottish Institute for Research in Economics (SIRE) 2010-62, Scottish Institute for Research in Economics (SIRE).
  12. Muhammad Tariq Majeed & Ronald MacDonald, 2010. "Distributional and Poverty Consequences of Globalization: A Dynamic Comparative Analysis for Developing Countries," Working Papers, Business School - Economics, University of Glasgow 2010_22, Business School - Economics, University of Glasgow.

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