Globalization and Employment: Imported Skill Biased Technological Change in Developing Countries

44 Pages Posted: 14 Jun 2007

See all articles by Andrea Conte

Andrea Conte

University of Turin; Max Planck Society for the Advancement of the Sciences - Entrepreneurship, Growth and Public Policy Group

Marco Vivarelli

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

Date Written: May 2007

Abstract

This paper discusses the occurrence of Skill-Enhancing Technology Import (SETI), namely the relationship between imports of embodied technology and widening skill-based employment differentials in a sample of low and middle income countries (LMICs). In doing so, this paper provides a direct measure of technology transfer at the sector level from high income countries (HICs), namely those economies which have already experienced the occurrence of skill-biased technological change, to LMICs. GMM techniques are applied to an original panel dataset comprising 28 manufacturing sectors for 23 countries over a decade. Econometric results provide robust evidence of the determinants of widening employment differentials in LMICs. In particular, capital-skill complementarity represents a source of relative skill-bias while SETI provides an absolute skill-bias effect on the employment trends of skilled and unskilled workers witnessed in these countries.

Keywords: skill biased technological change, capital skill complementarity, GMM estimation, general industrial statistics, world trade analyzer

JEL Classification: F16, J23, J24, O33

Suggested Citation

Conte, Andrea and Vivarelli, Marco, Globalization and Employment: Imported Skill Biased Technological Change in Developing Countries (May 2007). IZA Discussion Paper No. 2797; Jena Economic Research Paper No. 2007-009. Available at SSRN: https://ssrn.com/abstract=993480

Andrea Conte

University of Turin ( email )

Via Po 53
10124 Torino, Turin - Piedmont 10100
Italy

Max Planck Society for the Advancement of the Sciences - Entrepreneurship, Growth and Public Policy Group

Kahlaische Strasse 10
D-07745 Jena, 07745
Germany

HOME PAGE: http://www.mpiew-jena.mpg.de/english/staff/egp/conte.html

Marco Vivarelli (Contact Author)

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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