Globalization and Employment: Imported Skill Biased Technological Change in Developing Countries

Andrea Conte () and Marco Vivarelli ()

No 2797, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: This paper discusses the occurrence of Skill-Enhancing Technology Import (SETI), namely the relationship between imports of embodied technology and widening skill-based employment differentials in a sample of low and middle income countries (LMICs). In doing so, this paper provides a direct measure of technology transfer at the sector level from high income countries (HICs), namely those economies which have already experienced the occurrence of skill-biased technological change, to LMICs. GMM techniques are applied to an original panel dataset comprising 28 manufacturing sectors for 23 countries over a decade. Econometric results provide robust evidence of the determinants of widening employment differentials in LMICs. In particular, capital-skill complementarity represents a source of relative skill-bias while SETI provides an absolute skill-bias effect on the employment trends of skilled and unskilled workers witnessed in these countries.

Keywords: skill biased technological change; capital skill complementarity; GMM estimation; general industrial statistics; world trade analyzer (search for similar items in EconPapers)
JEL-codes: F16 J23 J24 O33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-int, nep-lab, nep-lam and nep-tid
Date: Written
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Working Paper: Globalization and Employment: Imported Skill Biased Technological Change in Developing Countries (2007)
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