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Skill-Biased Technological Change and Skill-Enhancing Trade in Turkey: Evidence from Longitudinal Microdata

  • Srour, Ilina


    (Università Cattolica del Sacro Cuore)

  • Taymaz, Erol


    (Middle East Technical University)

  • Vivarelli, Marco


    (Università Cattolica del Sacro Cuore)

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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7320.

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Length: 25 pages
Date of creation: Mar 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7320
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