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Importing Skill-Biased Technology

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  • Jonathan Vogel

    (Columbia and NBER)

  • Javier Cravino

    (UCLA)

  • Ariel Burstein

    (UCLA and NBER)

Abstract

Capital equipment, such as computers and industrial machinery, embodies skill-biased technology and, hence, is complementary to skilled labor. Many countries, by importing a large share of their capital, import skill-biased technology and a rise in the skill premium. In this paper we develop a model to derive the qualitative and quantitative implications of changes in trade patterns for the skill premium through capital-skill complementarity. In one counterfactual, we find that moving from the trade levels observed in the year 2000 to autarky would imply a decrease in the skill premium of 14% for the median country in our sample, of 5% for the U.S., and of a much larger magnitude for countries that heavily rely on imported capital equipment.

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Bibliographic Info

Paper provided by Society for Economic Dynamics in its series 2011 Meeting Papers with number 440.

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Date of creation: 2011
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Handle: RePEc:red:sed011:440

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Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
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References

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Citations

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Cited by:
  1. Arnaud Costinot & Andrés Rodríguez-Clare, 2013. "Trade Theory with Numbers: Quantifying the Consequences of Globalization," NBER Working Papers 18896, National Bureau of Economic Research, Inc.
  2. Ariel Burstein & Jonathan Vogel, 2011. "Factor Prices and International Trade: A Unifying Perspective," NBER Working Papers 16904, National Bureau of Economic Research, Inc.
  3. Alberto Behar, 2013. "The Endogenous Skill Bias of Technical Change and Inequality in Developing Countries," IMF Working Papers 13/50, International Monetary Fund.

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