Globalization and Employment: Imported Skill Biased Technological Change in Developing Countries
44 Pages Posted: 14 Jun 2007
Date Written: May 2007
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
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