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Is skill-biased technological change here yet ? Evidence from Indian manufacturing in the 1990

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  • Berman, Eli
  • Somanathan, Rohini
  • Tan, Hong W.

Abstract

Most high and middle-income countries showed symptoms of skill-biased technological change in the 1980s. India-a low income country-did not, perhaps because India's traditionally controlled economy may have limited the transfer of technologies from abroad. However the economy underwent a sharp reform and a manufacturing boom in the 1990s, raising the possibility that technology absorption may have accelerated during the past decade. The authors investigate the hypothesis that skill-biased technological change did in fact arrive in India in the 1990s using panel data disaggregated by industry and state from the Annual Survey of Industry. These data confirm that while the 1980s were a period of falling skills demand, the 1990s showed generally rising demand for skills, with variation across states. They find that increased output and capital-skill complementarity appear to be the best explanations of skill upgrading in the 1990s. Skill upgrading did not occur in the same set of industries in India as it did in other countries, suggesting that increased demand for skills in Indian manufacturing is not due to the international diffusion of recent vintages of skill-biased technologies.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3761.

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Date of creation: 01 Nov 2005
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Handle: RePEc:wbk:wbrwps:3761

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Keywords: Economic Theory&Research; Labor Markets; Investment and Investment Climate; Education and Digital Divide; Water and Industry;

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  1. Timothy Besley & Robin Burgess, 2004. "Can Labor Regulation Hinder Economic Performance? Evidence from India," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 119(1), pages 91-134, February.
  2. Eli Berman & John Bound & Stephen Machin, 1997. "Implications of Skill-Biased Technological Change: International Evidence," NBER Working Papers 6166, National Bureau of Economic Research, Inc.
  3. Attanasio, Orazio & Goldberg, Pinelopi & Pavcnik, Nina, 2003. "Trade Reforms and Wage Inequality in Colombia," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4023, C.E.P.R. Discussion Papers.
  4. Eli Berman, 2000. "Does Factor-Biased Technological Change Stifle International Covergence? Evidence from Manufacturing," NBER Working Papers 7964, National Bureau of Economic Research, Inc.
  5. Jeffrey Sachs & Andrew Warner, 1995. "Economic Reform and the Progress of Global Integration," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1733, Harvard - Institute of Economic Research.
  6. Lawrence F. Katz & Gary W. Loveman & David G. Blanchflower, 1993. "A Comparison of Changes in the Structure of Wages," NBER Working Papers 4297, National Bureau of Economic Research, Inc.
  7. Claudia Goldin & Lawrence F. Katz, 1996. "The Origins of Technology-Skill Complementarity," NBER Working Papers 5657, National Bureau of Economic Research, Inc.
  8. Sanchez-Paramo, Carolina & Schady, Norbert, 2003. "Off and running? Technology, trade and the rising demand for skilled workers in Latin America," Policy Research Working Paper Series, The World Bank 3015, The World Bank.
  9. Berman, Eli & Machin, Stephen, 2000. "Skill-Based Technology Transfer around the World," Oxford Review of Economic Policy, Oxford University Press, Oxford University Press, vol. 16(3), pages 12-22, Autumn.
  10. Gordon H. Hanson & Ann Harrison, 1995. "Trade, Technology, and Wage Inequality," NBER Working Papers 5110, National Bureau of Economic Research, Inc.
  11. Griliches, Zvi, 1969. "Capital-Skill Complementarity," The Review of Economics and Statistics, MIT Press, vol. 51(4), pages 465-68, November.
  12. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, Elsevier, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
  13. Griliches, Zvi, 1986. "Economic data issues," Handbook of Econometrics, Elsevier, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 3, chapter 25, pages 1465-1514 Elsevier.
  14. Eli Berman & John Bound & Zvi Griliches, 1993. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
  15. F. Zilibotti & P. Aghion & R. Burgess, 2004. "The Unequal Effects of Trade Liberalization: Theory and Evidence from India," 2004 Meeting Papers, Society for Economic Dynamics 40, Society for Economic Dynamics.
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Cited by:
  1. Guy Michaels & Ashwini Natraj & John Van Reenen, 2010. "Has ICT Polarized Skill Demand? Evidence from Eleven Countries over 25 years," NBER Working Papers 16138, National Bureau of Economic Research, Inc.
  2. 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).
  3. Ural Marchand, Beyza, 2011. "Tariff Pass-Through and the Distributional Effects of Trade Liberalization," Working Papers 2011-22, University of Alberta, Department of Economics.

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