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Skill-biased Technology Adoption: Evidence for the Chilean manufacturing sector

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  • Olga M. Fuentes

    (Institute for Economic Development,Boston University)

  • Simon Gilchrist

    (Institute for Economic Development,Boston University)

Abstract

We examine the evolution of the demand for skilled workers relative to unskilled workers in the Chilean manufacturing sector following Chile’s liberalization of trade in the late 1970’s. Following such trade reforms, the standard Heckscher-Olin model predicts that a low labor-cost country like Chile should experience an increased demand for low skilled workers relative to high skilled workers. Alternatively, if trade liberalization is associated with the adoption of new technologies, and technology is skill-biased, the relative demand for skilled workers may rise. Using a newly available plant-level data set that spans the sixteen year period 1979-1995, we find that the relative demand for skilled workers rose sharply during the 1979-1986 period and then stabilized. The sharp increase in demand for skilled workers coincided with an increased propensity to adopt new technologies as measured by patent usage. Plant-level analysis of labor demand confirms a significant relationship between the relative demand for skilled workers and technology adoption as measured by patent usage and other technology indicators. Our results suggest that skill-biased technological change is a significant determinant of labor demand and wage structures in developing economies.

Suggested Citation

  • Olga M. Fuentes & Simon Gilchrist, 2005. "Skill-biased Technology Adoption: Evidence for the Chilean manufacturing sector," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-150, Boston University - Department of Economics.
    • Handle: RePEc:bos:iedwpr:dp-150
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    References listed on IDEAS

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    Cited by:

    1. Adel Ben youssef & Walid Hadhri & Hatem Mhenni, 2014. "Adoption of Information and Communication Technologies and New Organizational Practices in the Tunisian Manufacturing Sector," Economics Bulletin, AccessEcon, vol. 34(4), pages 2237-2252.
    2. Christopher L. House, 2008. "Fixed Costs and Long-Lived Investments," NBER Working Papers 14402, National Bureau of Economic Research, Inc.
    3. Monia Ghazali, 2010. "Trade Openness, Relative Demand of Skilled Workers and Technological Change in Tunisia, 1998–2002," Working Papers 554, Economic Research Forum, revised 10 Jan 2010.
    4. Adel Ben Youssef & Walid Hadhri & Téja Meharzi, 2015. "Adoption of Cloud Computingin Emerging Countries: The Role of the Absorptive Capacity," Post-Print halshs-01302772, HAL.
    5. Ryan Michaels, 2013. "The Joint Dynamics of Capital and Employment at the Plant Level," 2013 Meeting Papers 1189, Society for Economic Dynamics.
    6. Mohamed Kossaï & Patrick Piget, 2012. "Utilisation des technologies de l'information et des communications (TIC) et performance économique des PME Tunisiennes :une étude économétrique," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 55(3), pages 305-328.

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