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Does Factor-Biased Technological Change Stifle International Covergence? Evidence from Manufacturing

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  • Eli Berman

Abstract

Factor-biased technological change implies divergent productivity growth across countries with different amounts of skill and capital per worker. I estimate the extent of factor bias within industries and countries using a 19-country panel of manufacturing data covering the 1980s. Estimates using both production functions and total factor productivity functions show that technological change is strongly biased against less-skilled workers and toward both skilled workers and capital. An industry or country with twice the capital and skill per less-skilled worker enjoys 1.4%-1.8% faster total factor productivity growth annually due to the effects of factor-bias. These results are consistent with the empirical literature on skill-biased technological change. They may well explain why conditional convergence' of per capita income across countries is so slow.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7964.

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Date of creation: Oct 2000
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Handle: RePEc:nbr:nberwo:7964

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Cited by:
  1. Pawlik, Konrad, 2005. "How knowledge transfer and absorption impact on the profitability of foreign affiliates in Transition Economy? The case of Poland: 1993-2002," Working Papers 2005-5, University of Aarhus, Aarhus School of Business, Department of Management.
  2. Eli Berman & Rohini Somanathan & Hong W. Tan, 2010. "Is Skill Biased Technological Change Here Yet? Evidence from India Manufacturing in the 1990s," NBER Chapters, in: Contributions in Memory of Zvi Griliches, pages 299-321 National Bureau of Economic Research, Inc.
  3. Akerman, Anders & Gaarder, Ingvil & Mogstad, Magne, 2013. "The Skill Complementarity of Broadband Internet," Research Papers in Economics 2013:15, Stockholm University, Department of Economics.

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