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

Author

Listed:
  • Conte, Andrea

    (European Commission)

  • Vivarelli, Marco

    (Università Cattolica del Sacro Cuore)

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.

Suggested Citation

  • Conte, Andrea & Vivarelli, Marco, 2007. "Globalization and Employment: Imported Skill Biased Technological Change in Developing Countries," IZA Discussion Papers 2797, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2797
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    Keywords

    world trade analyzer; general industrial statistics; skill biased technological change; capital skill complementarity; GMM estimation;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • 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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