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Distant labour supply, skills and induced technical change

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  • Ashima Goyal

    (Indira Gandhi Institute of Development Research)

Abstract

To analyze the consequences of new technologies, which make it possible to employ distant labour, we model a developed country with high and medium-skilled labour interacting with an emerging market economy (EME) with medium and low-skilled labour. Expansion in labour supply induces medium-skill biased technical change, which raises the demand for such labour. As a result, inequalities tend to fall in the developed country, skill premiums rise marginally in the EME, but equality rises because labour employed in the low-skilled sector shrinks. Inequality falls across the countries since average wages, information and access rise in the EME.

Suggested Citation

  • Ashima Goyal, 2006. "Distant labour supply, skills and induced technical change," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2006-014, Indira Gandhi Institute of Development Research, Mumbai, India.
    • Handle: RePEc:ind:igiwpp:2006-014
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    Cited by:

    1. Ashima Goyal, 2013. "Growth drivers: ICT and inclusive innovations," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2013-018, Indira Gandhi Institute of Development Research, Mumbai, India.
    2. Ashima Goyal, 2006. "The Impact of ICT in Making Global Markets More Inclusive," Development Economics Working Papers 22336, East Asian Bureau of Economic Research.

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    More about this item

    Keywords

    Internet and communication technology; induced technological change; relative factor supplies; labour skills;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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