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Is Skill Biased Technological Change Here Yet? Evidence from India Manufacturing in the 1990s

In: Contributions in Memory of Zvi Griliches

Author

Listed:
  • Eli Berman
  • Rohini Somanathan
  • Hong W. Tan

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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Suggested Citation

  • 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.
  • Handle: RePEc:nbr:nberch:12237
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    1. Attanasio, Orazio & Goldberg, Pinelopi K. & Pavcnik, Nina, 2004. "Trade reforms and wage inequality in Colombia," Journal of Development Economics, Elsevier, vol. 74(2), pages 331-366, August.
    2. 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 3015, The World Bank.
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    11. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
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    Cited by:

    1. Ural Marchand, Beyza, 2012. "Tariff pass-through and the distributional effects of trade liberalization," Journal of Development Economics, Elsevier, vol. 99(2), pages 265-281.
    2. 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.
    3. Meschi, Elena & Taymaz, Erol & Vivarelli, Marco, 2011. "Trade, technology and skills: Evidence from Turkish microdata," Labour Economics, Elsevier, vol. 18(S1), pages 60-70.
    4. repec:eee:wdevel:v:97:y:2017:i:c:p:313-329 is not listed on IDEAS
    5. Guy Michaels & Ashwini Natraj & John Van Reenen, 2010. "Has ICT Polarized Skill Demand? Evidence from Eleven Countries over 25 Years," CEP Discussion Papers dp0987, Centre for Economic Performance, LSE.
    6. repec:eee:reveco:v:51:y:2017:i:c:p:145-156 is not listed on IDEAS
    7. Mukherjee, Soumyatanu, 2016. "Technology, trade and ‘urban poor’ in a general equilibrium model with segmented domestic factor markets," International Review of Economics & Finance, Elsevier, vol. 45(C), pages 400-416.
    8. Woong Lee, 2017. "Trade Liberalization and the Aggregate Matching Function in India," Asian Economic Papers, MIT Press, vol. 16(1), pages 120-137, Winter/Sp.
    9. LEE, Jong-Wha & Wie, Dainn, 2017. "Wage Structure and Gender Earnings Differentials in China and India," World Development, Elsevier, vol. 97(C), pages 313-329.
    10. CHI, Wei, 2008. "The role of human capital in China's economic development: Review and new evidence," China Economic Review, Elsevier, vol. 19(3), pages 421-436, September.

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