Importing Skill-Biased Technology

Ariel Burstein, Javier Cravino and Jonathan Vogel

No 17460, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Capital equipment - such as computers and industrial machinery - embodies skill-biased technology, in the sense that it is complementary to skilled labor. Most countries import a large share of their capital equipment, and by doing so import skill-biased technology. In this paper we develop a tractable quantitative model of international trade in capital goods to quantify the extent to which trade, through capital-skill complementarity, raises the relative demand for skill and hence increases the skill premium. In one counterfactual, we find that moving from the trade levels observed in the year 2000 to autarky would decrease the skill premium by 16% in the median country in our sample, by 5% in the US, and by a much larger magnitude in countries that heavily rely on imported capital equipment.

JEL-codes: F1 (search for similar items in EconPapers)
Date: 2011-09
New Economics Papers: this item is included in nep-cwa and nep-int
Note: ITI
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Citations: View citations in EconPapers (5)

Published as Ariel Burstein & Javier Cravino & Jonathan Vogel, 2013. "Importing Skill-Biased Technology," American Economic Journal: Macroeconomics, American Economic Association, vol. 5(2), pages 32-71, April.

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Related works:
Journal Article: Importing Skill-Biased Technology (2013)
Working Paper: Importing Skill-Biased Technology (2011)
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