Quality Upgrading, Skill Demand and International Trade: The Case of German Manufacturing

Elisabeth Kutschka ()
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Elisabeth Kutschka: Faculty of Economics and Management, Otto-von-Guericke University Magdeburg

No 110022, FEMM Working Papers from Otto-von-Guericke University Magdeburg, Faculty of Economics and Management

Abstract: The present paper contributes to the ongoing debate about how international trade can affect the demand for skills in industrial countries by estimating the impact of quality competition on the relative demand for low skilled workers in German manufacturing between 1995 and 2004. Results reveal a statistically significant negative effect albeit relatively small in size with quality competition accounting for approximately 5% of the overall decline in low skilled workers' wage bill share. This effect entirely stems from quality competition with other advanced countries. The influence of trade in different qualities with newly industrializing economies is negligible.

Keywords: international trade; quality differentiated products; labour demand (search for similar items in EconPapers)
JEL-codes: C23 F16 J23 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2011-10
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:mag:wpaper:110022

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