Machines and machinists: Capital-Skill Complementarity from an International Trade Perspective

Miklós Koren and Marton Csillag ()
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Marton Csillag: TIER - University of Maastricht

No 1114, CERS-IE WORKING PAPERS from Institute of Economics, Centre for Economic and Regional Studies

Abstract: We estimate the effect of imported machines on the wages of machine operators utilizing Hungarian linked employer-employee data. We infer exposure to imported machines from detailed trade statistics of the firm and the occupation description of the worker. We find that workers exposed to imported machines earn about 8 percent higher wages than other machine operators at the same firm. When we proxy for unobserved worker characteristics, we find a significant 3 percent wage premium, suggesting that the relationship is causal. The return to schooling is also higher on imported machines. We build a simple matching model consistent with these findings. Our findings suggest that machine imports can be an important channel through which skill-biased technical change reaches less developed and emerging economies.

Keywords: imported machinery; capital-skill complementarity; wages (search for similar items in EconPapers)
JEL-codes: F16 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2011-04
New Economics Papers: this item is included in nep-bec, nep-int and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

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Related works:
Working Paper: Machines and machinists: Capital-skill complementarity from an international trade perspective (2011)
Working Paper: Machines and machinists: Capital-skill complementarity from an international trade perspective (2011)
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