IDEAS home Printed from https://ideas.repec.org/p/ctc/serie2/dises1393.html
   My bibliography  Save this paper

Technological Change and Skill-based Employment Disparities: Evidence from Turkey

Author

Listed:
  • Ilina Srour

    () (Universita Cattolica del Sacro Cuore, Milano)

  • Marco Vivarelli

    () (Università Cattolica del Sacro Cuore, Piacenza)

  • Erol Taymaz

    () (Department of Economics, Middle East Technical University, Ankara)

Abstract

This paper explores the causes of skill-based employment differentials within the Turkish manufacturing sector over the period 1980-2001. Turkey is taken as an example of a developing economy that, in that period, had been technologically advancing and becoming increasingly integrated with the world market. The empirical analysis is performed at firm level within a dynamic framework using a two-equation model that depicts the employment trends for skilled and unskilled workers separately. In particular, the System Generalized Method of Moments (GMM-SYS) procedure is applied to a panel dataset comprised of 17,462 firms. Our results confirm the theoretical expectation that developing countries face the phenomena of skill-biased technological change and skill-enhancing technology import, both leading to increasing the employment gap between skilled and unskilled workers. In particular, strong evidence of a relative skill bias emerges: both domestic and imported technologies increase the demand for skilled labor 5 to 6 times more than the corresponding demand for the unskilled labor. Finally, “learning by export” also appears to have a skill biased impact, but to a lesser extent.

Suggested Citation

  • Ilina Srour & Marco Vivarelli & Erol Taymaz, 2013. "Technological Change and Skill-based Employment Disparities: Evidence from Turkey," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1393, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  • Handle: RePEc:ctc:serie2:dises1393
    as

    Download full text from publisher

    File URL: http://www.unicatt.it/dipartimenti/DISES/allegati/dises1393.pdf
    File Function: First version, 2013
    Download Restriction: no

    References listed on IDEAS

    as
    1. Taymaz, Erol & Yilmaz, Kamil, 2006. "Productivity and Trade Orientation: Turkish Manufacturing Industry Before and After the Customs Union," MPRA Paper 58843, University Library of Munich, Germany, revised 2007.
    2. Van Reenen, John, 1997. "Employment and Technological Innovation: Evidence from U.K. Manufacturing Firms," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 255-284, April.
    3. Lachenmaier, Stefan & Rottmann, Horst, 2011. "Effects of innovation on employment: A dynamic panel analysis," International Journal of Industrial Organization, Elsevier, pages 210-220.
    4. Erin Yeldan & Kivilcim Metin-…zcan & Ebru Voyvoda, 1999. "Dynamics of Macroeconomic Adjustment in a Globalized Developing Economy : Growth, Accumulation and Distribution, Turkey 1969-1998," Working Papers 9905, Department of Economics, Bilkent University.
    5. Görg, Holger & Strobl, Eric, 2002. "Relative Wages, Openness and Skill-Biased Technological Change," IZA Discussion Papers 596, Institute for the Study of Labor (IZA).
    6. Daron Acemoglu, 1998. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," The Quarterly Journal of Economics, Oxford University Press, pages 1055-1089.
    7. Tobias Regner & Maija Halonen-Akatwijuka, 2004. "Digital Technology And The Allocation Of Ownership In The Music Industry," Royal Economic Society Annual Conference 2004 54, Royal Economic Society.
    8. Yeaple, Stephen Ross, 2005. "A simple model of firm heterogeneity, international trade, and wages," Journal of International Economics, Elsevier, pages 1-20.
    9. Dani Rodrik, 1995. "Trade Strategy, Investment, and Exports: Another Look at East Asia," NBER Working Papers 5339, National Bureau of Economic Research, Inc.
    10. Rudiger Dornbusch & Stanley Fischer & Paul A. Samuelson, 1980. "Heckscher-Ohlin Trade Theory with a Continuum of Goods," The Quarterly Journal of Economics, Oxford University Press, pages 203-224.
    11. Feenstra, Robert C & Hanson, Gordon H, 1996. "Globalization, Outsourcing, and Wage Inequality," American Economic Review, American Economic Association, pages 240-245.
    12. Bruno Cesar Araújo & Francesco Bogliacino & Marco Vivarelli, 2011. "Technology, trade and skills in Brazil: Some evidence from microdata," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1171, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    13. Stephen Machin & John Van Reenen, 1998. "Technology and Changes in Skill Structure: Evidence from Seven OECD Countries," The Quarterly Journal of Economics, Oxford University Press, pages 1215-1244.
    14. Jorge Saba Arbache, 2015. "Trade Liberalization and Labor Markets in Developing Countries: Theory and Evidence," Discussion Papers 0110, Instituto de Pesquisa Econômica Aplicada - IPEA.
    15. Vivarelli, Marco, 2007. "Innovation and Employment: A Survey," IZA Discussion Papers 2621, Institute for the Study of Labor (IZA).
    16. Pamukcu, Teoman, 2003. "Trade Liberalization and Innovation Decisions of Firms: Lessons from Post-1980 Turkey," World Development, Elsevier, pages 1443-1458.
    17. Richard Blundell & Stephen Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
    18. 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), pages 63-95.
    19. Daron Acemoglu, 2003. "Patterns of Skill Premia," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 199-230.
    20. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, pages 1417-1426.
    21. Stephen Machin & John Van Reenen, 1998. "Technology and changes in skill structure: evidence from seven OECD countries," IFS Working Papers W98/04, Institute for Fiscal Studies.
    22. Brian J. Hall & David E. Weinstein, 1996. "The Myth of the Patient Japanese: Corporate Myopia and Financial Distress in Japan and the US," NBER Working Papers 5818, National Bureau of Economic Research, Inc.
    23. Hendry, David F. & Clements, Michael P., 2003. "Economic forecasting: some lessons from recent research," Economic Modelling, Elsevier, pages 301-329.
    24. Olga Fuentes & Simon Gilchrist, 2005. "Trade Orientation and Labor Market Evolution: Evidence from Chilean Plant-level Data," Central Banking, Analysis, and Economic Policies Book Series,in: Jorge Restrepo & Andrea Tokman R. & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series Edi (ed.), Labor Markets and Institutions, edition 1, volume 8, chapter 13, pages 411-435 Central Bank of Chile.
    25. Andrea CONTE & Marco VIVARELLI, 2011. "Imported Skill‐Biased Technological Change In Developing Countries," The Developing Economies, Institute of Developing Economies, vol. 49(1), pages 36-65, March.
    26. Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
    27. Özçelik, Emre & Taymaz, Erol, 2008. "R&D support programs in developing countries: The Turkish experience," Research Policy, Elsevier, pages 258-275.
    28. Griliches, Zvi, 1969. "Capital-Skill Complementarity," The Review of Economics and Statistics, MIT Press, pages 465-468.
    29. Revenga, Ana, 1997. "Employment and Wage Effects of Trade Liberalization: The Case of Mexican Manufacturing," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 20-43, July.
    30. Pablo Fajnzylber & Ana Fernandes, 2009. "International economic activities and skilled labour demand: evidence from Brazil and China," Applied Economics, Taylor & Francis Journals, vol. 41(5), pages 563-577.
    31. Erin Yeldan & Kivilcim Metin-…zcan & Ebru Voyvoda, 1999. "Dynamics of Macroeconomic Adjustment in a Globalized Developing Economy : Growth, Accumulation and Distribution, Turkey 1969-1998," Working Papers 9905, Department of Economics, Bilkent University.
    32. Feenstra, Robert C & Hanson, Gordon H, 1996. "Globalization, Outsourcing, and Wage Inequality," American Economic Review, American Economic Association, pages 240-245.
    33. Meschi, Elena & Taymaz, Erol & Vivarelli, Marco, 2011. "Trade, technology and skills: Evidence from Turkish microdata," Labour Economics, Elsevier, pages 60-70.
    34. Lachenmaier, Stefan & Rottmann, Horst, 2011. "Effects of innovation on employment: A dynamic panel analysis," International Journal of Industrial Organization, Elsevier, pages 210-220.
    35. Jorge Saba Arbache, 2001. "Trade Liberalisation and Labor Markets in Developing Countries: Theory and Evidence," Studies in Economics 0112, School of Economics, University of Kent.
    36. Pavcnik, Nina, 2003. "What explains skill upgrading in less developed countries?," Journal of Development Economics, Elsevier, pages 311-328.
    37. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, pages 371-393.
    38. Meschi, Elena & Vivarelli, Marco, 2009. "Trade and Income Inequality in Developing Countries," World Development, Elsevier, pages 287-302.
    39. Donald R. Davis, 1996. "Trade Liberalization and Income Distribution," Harvard Institute of Economic Research Working Papers 1769, Harvard - Institute of Economic Research.
    40. Berman, Eli & Machin, Stephen, 2000. "Skill-Based Technology Transfer around the World," Oxford Review of Economic Policy, Oxford University Press, vol. 16(3), pages 12-22, Autumn.
    41. Vivarelli, Marco, 2012. "Innovation, Employment and Skills in Advanced and Developing Countries: A Survey of the Literature," IZA Discussion Papers 6291, Institute for the Study of Labor (IZA).
    42. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
    43. Pavcnik, Nina, 2003. "What explains skill upgrading in less developed countries?," Journal of Development Economics, Elsevier, pages 311-328.
    44. Eddy LEE & Marco VIVARELLI, 2006. "The social impact of globalization in the developing countries," International Labour Review, International Labour Organization, pages 167-184.
    45. Birchenall, Javier A., 2001. "Income distribution, human capital and economic growth in Colombia," Journal of Development Economics, Elsevier, pages 271-287.
    46. Marco Vivarelli, 1995. "The Economics of Technology and Employment," Books, Edward Elgar Publishing, number 458.
    47. Welch, F, 1970. "Education in Production," Journal of Political Economy, University of Chicago Press, vol. 78(1), pages 35-59, Jan.-Feb..
    48. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, pages 115-143.
    49. Meschi, Elena & Taymaz, Erol & Vivarelli, Marco, 2011. "Trade, technology and skills: Evidence from Turkish microdata," Labour Economics, Elsevier, pages 60-70.
    50. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed the Labor Market?," The Quarterly Journal of Economics, Oxford University Press, pages 1169-1213.
    51. Bogliacino, Francesco & Vivarelli, Marco & Araújo, Bruno César, 2011. "Technology, trade and skills in Brazil: evidence from micro data," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    52. Stephen Machin & John Van Reenen, 1998. "Technology and Changes in Skill Structure: Evidence from Seven OECD Countries," The Quarterly Journal of Economics, Oxford University Press, pages 1215-1244.
    53. Anderson, T. W. & Hsiao, Cheng, 1982. "Formulation and estimation of dynamic models using panel data," Journal of Econometrics, Elsevier, pages 47-82.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Skill-biased technological change; technology transfer; panel data; GMM-SYS;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ctc:serie2:dises1393. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Francesco Timpano) or (Giancarlo Birello). General contact details of provider: http://edirc.repec.org/data/dscatit.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.