Globalization, Technological Change and Labor Demand: A Firm Level Analysis for Turkey

Elena Meschi, Erol Taymaz and Marco Vivarelli ()

No 9453, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper studies the interlinked relationship between globalization 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 2+2 equations 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.

Keywords: skill‐biased technological change; international technology transfer; GMM‐SYS (search for similar items in EconPapers)
JEL-codes: O33 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2015-10
New Economics Papers: this item is included in nep-ara, nep-cse, nep-cwa, nep-ino and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: Review of World Economics, 2016, 152, 655-680

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Journal Article: Globalization, technological change and labor demand: a firm-level analysis for Turkey (2016)
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