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Quality Upgrading, Skill Demand and International Trade: The Case of German Manufacturing

Author

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  • Elisabeth Kutschka

    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

Abstract

The present paper contributes to the ongoing debate about how international trade can affect the demand for skills in industrial countries by estimating the impact of quality competition on the relative demand for low skilled workers in German manufacturing between 1995 and 2004. Results reveal a statistically significant negative effect albeit relatively small in size with quality competition accounting for approximately 5% of the overall decline in low skilled workers' wage bill share. This effect entirely stems from quality competition with other advanced countries. The influence of trade in different qualities with newly industrializing economies is negligible.

Suggested Citation

  • Elisabeth Kutschka, 2011. "Quality Upgrading, Skill Demand and International Trade: The Case of German Manufacturing," FEMM Working Papers 110022, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    • Handle: RePEc:mag:wpaper:110022
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    References listed on IDEAS

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    Cited by:

    1. Fries, Jan, 2014. "Age and skill bias of trade liberalisation? Heterogeneous employment effects of EU Eastern Enlargement," ZEW Discussion Papers 14-113, ZEW - Leibniz Centre for European Economic Research.

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    More about this item

    Keywords

    international trade; quality differentiated products; labour demand;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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