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Trade Openness and the Demand for Skills: Evidence from Turkish Microdata

Author

Listed:
  • Meschi, Elena

    () (Università Ca’ Foscari di Venezia)

  • Taymaz, Erol

    () (Middle East Technical University)

  • Vivarelli, Marco

    () (Università Cattolica del Sacro Cuore)

Abstract

In this paper we report evidence on the relationship between trade openness, technology adoption and relative demand for skilled labour in the Turkish manufacturing sector, using firm-level data over the period 1980-2001. In a dynamic panel data setting using a unique database of 17,462 firms, we estimate an augmented cost share equation whereby the wage bill share of skilled workers in a given firm is related to international exposure and technology adoption. Overall, results suggest that trade openness and technology play a key role in shifting the demand for labour towards more skilled workers within each firm. Technology-related variables (domestic R&D expenditures and technological transfer from abroad) are positive and significantly related to skill upgrading, as are the involvement of foreign capital in a firm's ownership and the propensity to export. Moreover, firms belonging to those sectors that most raised their imported inputs also experienced a higher increase in the labour cost share of skilled workers. This finding is consistent with the idea that imports by a middle-income country imply a transfer of new technologies that are more skill-intensive than those previously in use in domestic markets. This idea is reinforced by the finding that only imported inputs from industrialised countries? where the potential for innovation diffusion comes from - enter the estimated regression significantly.

Suggested Citation

  • Meschi, Elena & Taymaz, Erol & Vivarelli, Marco, 2008. "Trade Openness and the Demand for Skills: Evidence from Turkish Microdata," IZA Discussion Papers 3887, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp3887
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    Cited by:

    1. repec:voj:journl:v:63:y:2016:i:5:p:581-601 is not listed on IDEAS
    2. 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), December.
    3. Bruno Cesar Araujo & Francesco Bogliacino & Marco Vivarelli, 2009. "The Role of "Skill enhancing Trade" in Brazil: Some Evidence from Microdata," Jena Economic Research Papers 2009-041, Friedrich-Schiller-University Jena.
    4. 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).

    More about this item

    Keywords

    technology transfer; GMM-SYS; globalisation; skills; skill-biased technological change;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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