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Globalization and Employment: Imported Skill Biased Technological Change in Developing Countries

  • Conte, Andrea

    ()

    (European Commission)

  • Vivarelli, Marco

    ()

    (Università Cattolica del Sacro Cuore)

This paper discusses the occurrence of Skill-Enhancing Technology Import (SETI), namely the relationship between imports of embodied technology and widening skill-based employment differentials in a sample of low and middle income countries (LMICs). In doing so, this paper provides a direct measure of technology transfer at the sector level from high income countries (HICs), namely those economies which have already experienced the occurrence of skill-biased technological change, to LMICs. GMM techniques are applied to an original panel dataset comprising 28 manufacturing sectors for 23 countries over a decade. Econometric results provide robust evidence of the determinants of widening employment differentials in LMICs. In particular, capital-skill complementarity represents a source of relative skill-bias while SETI provides an absolute skill-bias effect on the employment trends of skilled and unskilled workers witnessed in these countries.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2797.

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Length: 41 pages
Date of creation: May 2007
Date of revision:
Publication status: published in: Developing Economies, 2011, 49(1), 36-65
Handle: RePEc:iza:izadps:dp2797
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