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Global Knowledge and Local Inequality - Industry Level Evidence

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  • Ahmed S. Rahman

    () (United States Naval Academy)

Abstract

This paper attempts to ascertain if skill-biased technologies developed in R&D-active countries diffuse to the rest of the world. First, using a model of international trade, I show the effects of skill-bias knowledge diffusion. The theory suggests that skill-biased technological diffusion need not increase skill premia, as sectoral biases can exert countervailing forces. Second, I test implications from the theory using United Nations industry data. Skill-biased knowledge diffusion tends to be associated with rising local skill-premia more in skill-intensive industries than unskill-intensive ones. Thus sectoral biases can help us see the extent of such technological spillovers.

Suggested Citation

  • Ahmed S. Rahman, 2007. "Global Knowledge and Local Inequality - Industry Level Evidence," Departmental Working Papers 18, United States Naval Academy Department of Economics.
  • Handle: RePEc:usn:usnawp:18
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    File URL: http://www.usna.edu/EconDept/RePEc/usn/wp/usnawp18.pdf
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