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Globalisation, technology and the labour market: A microeconometric analysis for Turkey

Author

Listed:
  • Meschi, Elena

    (Ca Foscari University of Venice)

  • Taymaz, Erol

    (Middle East Technical University, Ankara)

  • Vivarelli, Marco

    (UNU‐MERIT, Maastricht University, IZA, Bonn and Università Cattolica del Sacro Cuore, Milano)

Abstract

This paper studies the interlinked relationship between globalisation and technological upgrading in affecting employment and wages of skilled and unskilled workers in a middle income developing country. It exploits a unique longitudinal firm-level database that covers all manufacturing firms in Turkey over the 1992-2001 period. Turkey is taken as an example of a developing economy that, in that period, had been technologically advancing and becoming increasingly integrated with the world market. The empirical analysis is performed at firm level within a dynamic framework using a model that depicts the employment and wage trends for skilled and unskilled workers separately. In particular, the System Generalized Method of Moments (GMM-SYS) procedure is applied to a panel dataset of about 15,000 firms. Our results confirm the theoretical expectation that developing countries face the phenomena of skill-biased technological change and skill-enhancing trade, both leading to increasing the employment and wage gap between skilled and unskilled workers. In particular, a strong evidence of a relative skill bias emerges: both domestic and imported technologies increase the relative demand for skilled workers more than the demand for the unskilled. "Learning by exporting" also appears to have a relative skill- biased impact, while FDI imply an absolute skill bias.

Suggested Citation

  • Meschi, Elena & Taymaz, Erol & Vivarelli, Marco, 2016. "Globalisation, technology and the labour market: A microeconometric analysis for Turkey," MERIT Working Papers 2016-026, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2016026
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Skill-biased technological change; international technology transfer; GMM-SYS;
    All these keywords.

    JEL classification:

    • 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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