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

25 Pages Posted: 13 Apr 2013

See all articles by Ilina Srour

Ilina Srour

Catholic University of the Sacred Heart of Milan

Erol Taymaz

Middle East Technical University - Department of Economics

Marco Vivarelli

Universita Cattolica del Sacro Cuore, Milano; IZA Institute of Labor Economics

Abstract

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.

Keywords: skill-biased technological change, technology transfer, panel data, GMM-SYS

JEL Classification: F16, O33

Suggested Citation

Srour, Ilina and Taymaz, Erol and Vivarelli, Marco, Skill-Biased Technological Change and Skill-Enhancing Trade in Turkey: Evidence from Longitudinal Microdata. IZA Discussion Paper No. 7320. Available at SSRN: https://ssrn.com/abstract=2250298

Ilina Srour (Contact Author)

Catholic University of the Sacred Heart of Milan ( email )

Erol Taymaz

Middle East Technical University - Department of Economics ( email )

Ankara, 06531
Turkey
+90312210 3034 (Phone)

HOME PAGE: http://www.metu.edu.tr/~etaymaz

Marco Vivarelli

Universita Cattolica del Sacro Cuore, Milano ( email )

Largo Gemelli 1
Milano, 20123
Italy

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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