IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

The Endogenous Skill Bias of Technical Change and Inequality in Developing Countries

  • Alberto Behar

This paper draws on existing empirical literature and an original theoretical model to argue that globalization and skill supply affect the extent to which technology adoption in developing countries favors skilled workers. Developing countries are experiencing technical change that is skill-biased because skill-biased technologies are becoming relatively cheaper. Increased skill supply further biases technical change in favor of skilled labor. Free trade induces technology that favors skilled workers in skill-abundant developing countries and that favors unskilled workers in skill-scarce developing countries, and therefore amplifies the predicted wage effects of trade liberalization. These features aid our understanding of the observed rises in inequality within developing countries and the absence of a significant downward effect of expanded educational attainment on skill premia. They also help account for the large and differential effects of trade liberalization on inequality. These findings are pertinent for the Middle East and North Africa because of its recent increase in trade openness and remarkable rise in educational attainment.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=40343
Download Restriction: no

Paper provided by International Monetary Fund in its series IMF Working Papers with number 13/50.

as
in new window

Length: 31
Date of creation: 26 Feb 2013
Date of revision:
Handle: RePEc:imf:imfwpa:13/50
Contact details of provider: Postal: International Monetary Fund, Washington, DC USA
Phone: (202) 623-7000
Fax: (202) 623-4661
Web page: http://www.imf.org/external/pubind.htm
Email:


More information through EDIRC

Order Information: Web: http://www.imf.org/external/pubs/pubs/ord_info.htm

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Chris Papageorgiou & Andreas Savvides & Marios Zachariadis, 2006. "International Medical Technology Diffsion," 2006 Meeting Papers 23, Society for Economic Dynamics.
  2. Piero Esposito & Robert Stehrer, 2007. "The Sector Bias of Skill-biased Technical Change and the Rising Skill Premium in Transition Economies," wiiw Working Papers 43, The Vienna Institute for International Economic Studies, wiiw.
  3. Anderson, Edward, 2005. "Openness and inequality in developing countries: A review of theory and recent evidence," World Development, Elsevier, vol. 33(7), pages 1045-1063, July.
  4. Paul Romer, 1989. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
  5. Francesco Caselli & Wilbur John Coleman II, 2000. "The World Technology Frontier," NBER Working Papers 7904, National Bureau of Economic Research, Inc.
  6. Kiminori Matsuyama, 2007. "Beyond Icebergs: Towards a Theory of Biased Globalization," Review of Economic Studies, Oxford University Press, vol. 74(1), pages 237-253.
  7. Julien Gourdon, 2011. "Trade and Wage Inequality in Developing Countries: South-South Trade Matter," Working Papers halshs-00557113, HAL.
  8. JW Fedderke & Martine Mariotti, 2002. "Changing Labour Market Conditions In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 70(5), pages 830-864, 06.
  9. Griliches, Zvi, 1969. "Capital-Skill Complementarity," The Review of Economics and Statistics, MIT Press, vol. 51(4), pages 465-68, November.
  10. Pinelopi Koujianou Goldberg & Nina Pavcnik, 2007. "Distributional Effects of Globalization in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 45(1), pages 39-82, March.
  11. Per Krusell & Lee E. Ohanian & JosÈ-Victor RÌos-Rull & Giovanni L. Violante, 2000. "Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis," Econometrica, Econometric Society, vol. 68(5), pages 1029-1054, September.
  12. Almeida, Rita K., 2010. "Openness and technological innovation in East Asia : have they increased the demand for skills ?," Policy Research Working Paper Series 5272, The World Bank.
  13. Acemoglu, D. & Zilibotti, F., 1998. "Productivity Differences," Papers 660, Stockholm - International Economic Studies.
  14. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May.
  15. Psacharopoulos, George & Hinchliffe, Keith, 1972. "Further Evidence on the Elasticity of Substitution among Different Types of Educated Labor," Journal of Political Economy, University of Chicago Press, vol. 80(4), pages 786-92, July-Aug..
  16. Jonathan Eaton & Samuel Kortum, 2001. "Trade in Capital Goods," NBER Working Papers 8070, National Bureau of Economic Research, Inc.
  17. Gordon H. Hanson, 2012. "The Rise of Middle Kingdoms: Emerging Economies in Global Trade," NBER Working Papers 17961, National Bureau of Economic Research, Inc.
  18. Adrian Wood & Jörg Mayer, 2011. "Has China de-industrialised other developing countries?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 147(2), pages 325-350, June.
  19. Behar Alberto, 2012. "Skill-Biased Technology Imports, Increased Schooling Access, and Income Inequality in Developing Countries," Journal of Globalization and Development, De Gruyter, vol. 2(2), pages 1-32, January.
  20. Paula Bustos, 2009. "Trade liberalization, exports and technology upgrading: Evidence on the impact of MERCOSUR on Argentinean firms," Economics Working Papers 1173, Department of Economics and Business, Universitat Pompeu Fabra.
  21. Caselli, Francesco & Wilson, Daniel J., 2004. "Importing technology," Journal of Monetary Economics, Elsevier, vol. 51(1), pages 1-32, January.
  22. Meschi, Elena & Vivarelli, Marco, 2009. "Trade and Income Inequality in Developing Countries," World Development, Elsevier, vol. 37(2), pages 287-302, February.
  23. Thoenig, Mathias & Verdier, Thierry, 2002. "A Theory of Defensive Skill-based Innovation and Globalization," CEPR Discussion Papers 3416, C.E.P.R. Discussion Papers.
  24. Hayami, Yujiro & Ruttan, Vernon W., 1969. "Factor Prices And Technical Change In Agricultural Development: The United States And Japan, 1880-1960," Staff Papers 14172, University of Minnesota, Department of Applied Economics.
  25. Daron Acemoglu, 2003. "Patterns of Skill Premia," Review of Economic Studies, Wiley Blackwell, vol. 70(2), pages 199-230, 04.
  26. 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, 03.
  27. Acemoglu, D., 1997. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," Working papers 97-14, Massachusetts Institute of Technology (MIT), Department of Economics.
  28. Ariel Burstein & Javier Cravino & Jonathan Vogel, 2013. "Importing Skill-Biased Technology," American Economic Journal: Macroeconomics, American Economic Association, vol. 5(2), pages 32-71, April.
  29. Robbins, Donald J, 2003. "The impact of trade liberalization upon inequality in developing countries : a review of theory and evidence," ILO Working Papers 365055, International Labour Organization.
  30. Knight, J. B. & Sabot, R. H., 1987. "Educational expansion, government policy and wage compression," Journal of Development Economics, Elsevier, vol. 26(2), pages 201-221, August.
  31. Filipe R. Campante & Davin Chor, 2012. "Why Was the Arab World Poised for Revolution? Schooling, Economic Opportunities, and the Arab Spring," Journal of Economic Perspectives, American Economic Association, vol. 26(2), pages 167-88, Spring.
  32. Donald Robbins, 2003. "The impact of trade liberalization upon inequality in developing countries - A review of theory and evidence-," DOCUMENTOS DE ECONOMÍA 003601, UNIVERSIDAD JAVERIANA - BOGOTÁ.
  33. Alberto Behar, 2009. "Directed technical change, the elasticity of substitution and wage inequality in developing countries," Economics Series Working Papers 467, University of Oxford, Department of Economics.
  34. Ben Salha Ousama, 2013. "Economic Globalization, Wages and Wage Inequality in Tunisia: An ARDL Bounds Testing Approach," Review of Middle East Economics and Finance, De Gruyter, vol. 9(3), pages 321-356, December.
  35. Donald R. Davis, 1996. "Trade Liberalization and Income Distribution," Harvard Institute of Economic Research Working Papers 1769, Harvard - Institute of Economic Research.
  36. Nathalie Chusseau & Michel Dumont & Jo�l Hellier, 2008. "Explaining Rising Inequality: Skill-Biased Technical Change And North-South Trade ," Journal of Economic Surveys, Wiley Blackwell, vol. 22(3), pages 409-457, 07.
  37. Martins, Pedro S. & Pereira, Pedro T., 2004. "Does education reduce wage inequality? Quantile regression evidence from 16 countries," Labour Economics, Elsevier, vol. 11(3), pages 355-371, June.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:13/50. 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: (Jim Beardow)

or (Hassan Zaidi)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.