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Does importing intermediates increase the demand for skilled workers? Plant-level evidence from Indonesia

Hiroyuki Kasahara (), Yawen Liang and Joel Rodrigue ()

Journal of International Economics, 2016, vol. 102, issue C, 242-261

Abstract: This paper examines whether starting to import contributes to skill upgrading among Indonesian plants. Our data records the distribution of years of employee schooling in each plant. We examine how starting to import affects the demand for highly educated workers within and across production and non-production occupations categories at the plant level. We estimate a model of importing and skill-biased technological change in which selection into importing arises due to unobservable heterogenous returns from importing. Both instrumental variable regression and marginal treatment effect estimates confirm that importing has substantially increased the relative demand for educated workers within each occupation. In contrast, we do not consistently estimate a significant impact of importing on the relative demand for non-production workers.

Keywords: Skill-biased technological change; Marginal treatment effect; Instrumental variable; Selection on unobservable returns (search for similar items in EconPapers)
JEL-codes: F14 F16 F63 D22 O33 (search for similar items in EconPapers)
Date: 2016
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Working Paper: Does Importing Intermediates Increase the Demand for Skilled Workers? Plant-level Evidence from Indonesia (2013) Downloads
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DOI: 10.1016/j.jinteco.2016.07.008

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