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What Explains Skill Upgrading in Less Developed Countries?

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  • Nina Pavcnik

Abstract

Although many developing countries have experienced growing income inequality and an increase in the relative demand for skilled workers during the 1980s, the sources of this trend remain a puzzle. This paper examines whether investment and adoption of skill-biased technology have contributed to within-industry skill upgrading using plant-level data from Chile. Using semiparametric and parametric approaches, I investigate whether plant-level measures of capital and investment, the use of imported materials, foreign technical assistance, and patented technology affect the relative demand for skilled workers. I find positive relationship between these measures and skill upgrading. Capital deepening and the adoption of skill biased technology therefore might contribute to the increased relative demand for skilled workers within industries.

Suggested Citation

  • Nina Pavcnik, 2000. "What Explains Skill Upgrading in Less Developed Countries?," NBER Working Papers 7846, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:7846
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    More about this item

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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