Trade and the skill-bias: it's not how much, but with whom you trade
This paper explores the hypothesis that changes in trading patterns and partners of US industries have contributed to skill deepening through defensive, skill-biased innovation. It draws on Thoenig and Verdier's (2003) assertion that, since skill-intensive technologies are less likely to be imitated, increased exposure to international competition promotes skill-biased innovation, due to the rise in the intensity of imitation by foreign firms. Our main proposition is that the rate of growth of a trading partner is related to the intensity of imitation from firms operating in that country, implying that an increase in the rate of growth of an industry's representative trading partner should contribute to the rise in its skill-intensity. We find empirical evidence in support of this notion, showing that the rise in the average growth rate of the trading partners has contributed to about 20% of the skilldeepening within US industries. By contrast, we find evidence that measures of the volume of trade do not matter significantly for the rise in skill-intensity, in line with existing literature.
|Date of creation:||Sep 2005|
|Date of revision:|
|Publication status:||Published by: Centre Emile Bernheim|
|Contact details of provider:|| Postal: |
Phone: +32 (0)2 650.48.64
Fax: +32 (0)2 650.41.88
Web page: http://difusion.ulb.ac.be
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Adrian Wood, 1995. "How Trade Hurt Unskilled Workers," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 57-80, Summer.
- Bradford J Jensen & Andrew B Bernard, 1994.
"Exporters, Skill Upgrading And The Wage Gap,"
94-13, Center for Economic Studies, U.S. Census Bureau.
- Jonathan Haskel & Matthew J. Slaughter, 1999.
"Trade, Technology and U.K. Wage Inequality,"
NBER Working Papers
6978, National Bureau of Economic Research, Inc.
- Acemoglu, Daron, 2002.
"Directed Technical Change,"
Review of Economic Studies,
Wiley Blackwell, vol. 69(4), pages 781-809, October.
- Robert E. Baldwin & Glen G. Cain, 2000. "Shifts In Relative U.S. Wages: The Role Of Trade, Technology, And Factor Endowments," The Review of Economics and Statistics, MIT Press, vol. 82(4), pages 580-595, November.
- William Easterly & Ross Levine, 2002.
"It's Not Factor Accumulation: Stylized Facts and Growth Models,"
Working Papers Central Bank of Chile
164, Central Bank of Chile.
- William Easterly & Ross Levine, 2002. "It´s Not Factor Accumulation: Stylized Facts and Growth Models," Central Banking, Analysis, and Economic Policies Book Series, in: Norman Loayza & Raimundo Soto & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series Editor) (ed.), Economic Growth: Sources, Trends, and Cycles, edition 1, volume 6, chapter 3, pages 061-114 Central Bank of Chile.
- Eric J. Bartelsman & Wayne Gray, 1996. "The NBER Manufacturing Productivity Database," NBER Technical Working Papers 0205, National Bureau of Economic Research, Inc.
- Wood, Adrian, 1998. "Globalisation and the Rise in Labour Market Inequalities," Economic Journal, Royal Economic Society, vol. 108(450), pages 1463-82, September.
- Josh Lerner, 2002.
"150 Years of Patent Protection,"
American Economic Review,
American Economic Association, vol. 92(2), pages 221-225, May.
- Wood Júnior, Thomaz, 1995. "Workers," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 35(2), January.
- David Autor & Lawrence Katz & Alan Krueger, 1997.
"Computing Inequality: Have Computers Changed the Labor Market?,"
756, Princeton University, Department of Economics, Industrial Relations Section..
- David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed The Labor Market?," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1169-1213, November.
- David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1997. "Computing Inequality: Have Computers Changed the Labor Market?," NBER Working Papers 5956, National Bureau of Economic Research, Inc.
- Krugman, Paul R., 2000.
"Technology, trade and factor prices,"
Journal of International Economics,
Elsevier, vol. 50(1), pages 51-71, February.
- Robert C. Feenstra & Gordon H. Hanson, 1996.
"Globalization, Outsourcing, and Wage Inequality,"
NBER Working Papers
5424, National Bureau of Economic Research, Inc.
- Berman, Eli & Bound, John & Griliches, Zvi, 1994. "Changes in the Demand for Skilled Labor within U.S. Manufacturing: Evidence from the Annual Survey of Manufactures," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 367-97, May.
- Haskel, Jonathan E. & Slaughter, Matthew J., 2002. "Does the sector bias of skill-biased technical change explain changing skill premia?," European Economic Review, Elsevier, vol. 46(10), pages 1757-1783, December.
- Jeffrey D. Sachs & Howard J. Shatz, 1994. "Trade and Jobs in Manufacturing," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1), pages 1-84.
When requesting a correction, please mention this item's handle: RePEc:sol:wpaper:05-010. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Benoit Pauwels)
If references are entirely missing, you can add them using this form.