SBTC versus trade: testing skill-premia evidence across 25 OECD countries

Alexandre Almeida and Oscar Afonso

Applied Economics Letters, 2010, vol. 17, issue 15, 1497-1501

Abstract: The recent widening of intra-country wage inequality in favour of high-skilled labour has been attributed by some authors to Skill-Biased Technological Change (SBTC) and by others to International Trade (IT) liberalization. As few empirical studies have tried to assess both explanations across a comprehensive sample of countries, we analyse the impact of both explanations within a unified framework and across 25 Organisation for Economic Co-operation and Development countries. Results suggest that the SBTC (IT) explanation dominates in developed (developing) countries and when intra-country wage inequality is measured by the wage ratio of college-to-lower (upper)-secondary graduates.

Date: 2010
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DOI: 10.1080/13504850903049601

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