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Industry and skill wage premiums in east Asia

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  • di Gropello, Emanuela
  • Sakellariou , Chris

Abstract

This paper focuses on the estimation of skill/industry premiums and labor force composition at the national and sector levels in seven East Asian countries with the objective of providing a comprehensive analysis of trends in demand for skills in the region. The paper addresses the following questions: Are there converging or diverging trends in the region regarding the evolution of skill premiums and labor force composition? Are changes in skill premiums generalized or industry-related? How have industry premiums evolved? The analysis uses labor and household surveys going back at least 10 years. The main trends emerging from the analysis are: (a) increasing proportions of skilled/educated workers over the long run across the region; (b) generally increasing demand for skills in the region; (c) the service sector has become the most important driver of demand for skills for all countries (except Thailand); (d) countries can be broadly categorized into three groups in relation to trends and patterns of demand for skills (Indonesia, Philippines, and Thailand; Vietnam and China; and Cambodia and Mongolia); and (e) industry premiums have increased in three countries of the region (Philippines, Thailand, and Cambodia). These trends point to several policyimplications, including that governments should focus on policies promoting access to education to address the increasing demand for skills and/or persistent skill shortages; support general rather than specific curricula given broad-based increases in skill premiums in most countries; better tailor curriculum design and content and pedagogical approaches to the needs of the service sector; and target some social protection programs to unskilled workers to protect them from the"unequalizing"impact of education.

Suggested Citation

  • di Gropello, Emanuela & Sakellariou , Chris, 2010. "Industry and skill wage premiums in east Asia," Policy Research Working Paper Series 5379, The World Bank.
    • Handle: RePEc:wbk:wbrwps:5379
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    References listed on IDEAS

    as
    1. David O’Connor & Mariarosa Lunati, 1999. "Economic Opening and the Demand for Skills in Developing Countries: A Review of Theory and Evidence," OECD Development Centre Working Papers 149, OECD Publishing.
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    Cited by:

    1. Rita K. Almeida, 2010. "Openness and Technological Innovation in East Asia: Have They Increased the Demand for Skills?," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 17(1), pages 63-95, June.
    2. Justin Caron & Thibault Fally & James Markusen, 2021. "Per capita income and the demand for skills," World Scientific Book Chapters, in: BROADENING TRADE THEORY Incorporating Market Realities into Traditional Models, chapter 12, pages 251-268, World Scientific Publishing Co. Pte. Ltd..
    3. Bruno Martorano & Donghyun Park & Marco Sanfilippo, 2017. "Catching-up, structural transformation, and inequality: industry-level evidence from Asia," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 26(4), pages 555-570.
    4. Sonali Jain-Chandra & Tidiane Kinda & Kalpana Kochhar & Shi Piao & Johanna Schauer, 2019. "Sharing the Growth Dividend: Analysis of Inequality in Asia," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 2(12), pages 5-28, September.
    5. Xu, Yang, 2022. "Structural change and the skill premium in a global economy," Journal of Economic Dynamics and Control, Elsevier, vol. 138(C).
    6. World Bank, 2012. "Leading with Ideas : Skills for Growth and Equity in Thailand," World Bank Publications - Reports 2732, The World Bank Group.
    7. Lee, Jong-Wha & Wie, Dainn, 2015. "Technological Change, Skill Demand, and Wage Inequality: Evidence from Indonesia," World Development, Elsevier, vol. 67(C), pages 238-250.
    8. Juzhong Zhuang, 2023. "Income and Wealth Inequality in Asia and the Pacific: Trends, Causes, and Policy Remedies," Asian Economic Policy Review, Japan Center for Economic Research, vol. 18(1), pages 15-41, January.
    9. Giovanni Andrea Cornia & Bruno Martorano, 2012. "Development Policies and Income Inequality in Selected Developing Regions, 1980–2010," UNCTAD Discussion Papers 210, United Nations Conference on Trade and Development.
    10. Chen, Shuang, 2018. "Education and transition to work: Evidence from Vietnam, Cambodia and Nepal," International Journal of Educational Development, Elsevier, vol. 61(C), pages 92-105.

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    Keywords

    Labor Markets; Water and Industry; Tertiary Education; Education For All; Secondary Education;
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