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Skill-biased technological change, international trade and the wage structure

Author

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  • Arnd Kölling

    (Institute for Employment Research (IAB))

  • Thorsten Schank

    (Institute for Employment Research (IAB))

Abstract

During the last two decades, the labour demand structure in Germany and other OECD countries has experienced a decrease in the demand for low skilled and a rise in the demand for highly skilled employees. The adoption of modern technologies in the production process as well as the growth of international trade are often regarded as the main driving factors behind this change. On the other hand, it is often argued that a more flexible wage structure could counteract the falling demand for the unskilled. This study investigates these hypothesis for West Germany, 1994-1997, using the LIAB, a unique German linked employer-employee panel data set, which combines information from the German employment statistics and the IAB establishment panel. Employing a Generalised Leontief cost function and controlling for unobserved plant heterogeneity, the demand for three different skill types of labour is estimated by the SUR-Method. The results show that the major part of the skill structure is determined by wages, while we have found only minor impacts of a skill-biased technological change, of international trade and of short-run effects due to the business cycle.

Suggested Citation

  • Arnd Kölling & Thorsten Schank, 2002. "Skill-biased technological change, international trade and the wage structure," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B1-3, International Conferences on Panel Data.
    • Handle: RePEc:cpd:pd2002:b1-3
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    Cited by:

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    2. Kohaut, Susanne & Schnabel, Claus, 2003. "Verbreitung, Ausmaß und Determinanten der übertariflichen Entlohnung," Discussion Papers 23, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    3. John Addison & Lutz Bellmann & Thorsten Schank & Paulino Teixeira, 2008. "The Demand for Labor: An Analysis Using Matched Employer–Employee Data from the German LIAB. Will the High Unskilled Worker Own-Wage Elasticity Please Stand Up?," Journal of Labor Research, Springer, vol. 29(2), pages 114-137, June.
    4. Carsten Ochsen, 2006. "Zukunft der Arbeit und Arbeit der Zukunft in Deutschland," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(2), pages 173-193, May.
    5. Ljubica Nedelkoska & Simon Wiederhold, 2010. "Technology, outsourcing, and the demand for heterogeneous labor: Exploring the industry dimension," Jena Economics Research Papers 2010-052, Friedrich-Schiller-University Jena.
    6. Carsten Ochsen & Heinz Welsch, 2005. "Technology, Trade, and Income Distribution in West Germany: A Factor-Share Analysis, 1976–1994," Journal of Applied Economics, Taylor & Francis Journals, vol. 8(2), pages 321-345, November.
    7. Falk, Martin, 2002. "Diffusion der Informations- und Kommunikationstechnologien und die Qualifikationsstruktur der Arbeitskräfte (Diffusion of information and communication technology and the qualification structure of th," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 35(3), pages 397-410.
    8. Holger Alda & Lutz Bellmann & Hermann Gartner, 2009. "Wage Structure and Labor Mobility in the West German Private Sector, 1993-2000," NBER Chapters, in: The Structure of Wages: An International Comparison, pages 261-313, National Bureau of Economic Research, Inc.
    9. Lurweg, Maren, 2010. "Perceived job insecurity, unemployment risk and international trade: A micro-level analysis of employees in German service industries," CAWM Discussion Papers 32, University of Münster, Münster Center for Economic Policy (MEP).
    10. Schank, Thorsten, 2003. "Die Beschäftigung von Un- und Angelernten : eine Analyse mit dem Linked Employer-Employee Datensatz des IAB (Employment of unskilled and semi-skilled workers * an analysis based on the IAB Linked Empl," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 36(3), pages 257-270.
    11. Lutz Bellmann, 2014. "Kontinuität und Veränderung des IAB-Betriebspanels [The development of the IAB establishment panel]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 47(1), pages 5-26, March.
    12. Bellmann, Lutz & Pahnke, André, 2006. "Auswirkungen organisatorischen Wandels auf die betriebliche Arbeitsnachfrage (Effects of organisational change on firms' demand for labour)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 39(2), pages 201-233.
    13. Schank, Thorsten & Schnabel, Claus, 2004. "Betriebliche Determinanten des Überstundeneinsatzes," Discussion Papers 24, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    14. Bellmann, Lutz & Caliendo, Marco & Hujer, Reinhard & Radic, Dubravko, 2002. "Beschäftigungswirkungen technisch-organisatorischen Wandels : eine mikroökonometrische Analyse mit dem Linked IAB-Panel (Technological and organisational change and its effects on employment : a micro," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 35(4), pages 506-522.
    15. Falk, Martin, 2002. "Diffusion der Informations- und Kommunikationstechnologien und die Qualifikationsstruktur der Arbeitskräfte (Diffusion of information and communication technology and the qualification structure of th," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 35(3), pages 397-410.
    16. Martin Falk & Hannes Leo, 2004. "Die Innovationsaktivitäten der österreichischen Unternehmen. Empirische Analysen auf Basis der Europäischen Innovationserhebung 1996 und 2000," WIFO Studies, WIFO, number 25249, March.
    17. Schank, Thorsten, 2003. "Die Beschäftigung von Un- und Angelernten : eine Analyse mit dem Linked Employer-Employee Datensatz des IAB (Employment of unskilled and semi-skilled workers * an analysis based on the IAB Linked Empl," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 36(3), pages 257-270.
    18. Bellmann, Lutz & Pahnke, André, 2006. "Auswirkungen organisatorischen Wandels auf die betriebliche Arbeitsnachfrage (Effects of organisational change on firms' demand for labour)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 39(2), pages 201-233.
    19. Bellmann, Lutz & Caliendo, Marco & Hujer, Reinhard & Radic, Dubravko, 2002. "Beschäftigungswirkungen technisch-organisatorischen Wandels : eine mikroökonometrische Analyse mit dem Linked IAB-Panel (Technological and organisational change and its effects on employment : a micro," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 35(4), pages 506-522.

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    More about this item

    Keywords

    labour demand; substitution; skill-biased technological change; labour hoarding; international trade; linked employer-employee data;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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