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

Elena Meschi, Erol Taymaz and Marco Vivarelli ()

No 2016-026, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

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.

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)
Date: 2016-05-17
New Economics Papers: this item is included in nep-ara, nep-cwa and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2016026

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