Technology, Trade, and Income Distribution in West Germany: A Factor-Share Analysis, 1976–1994

Carsten Ochsen and Heinz Welsch

Journal of Applied Economics, 2005, vol. 8, issue 2, 321-345

Abstract: This paper examines the determinants of functional income distribution in West Germany. The approach is to estimate a complete system of factor share equations for low-skilled labor, high-skilled labor, capital, energy, and materials, taking account of biased technological progress and increasing trade-orientation. Technological progress is found to reduce the share of low-skilled labor and to raise the share of high-skilled labor. The effect of technology bias on the two labor shares is enhanced by substitution of intermediate inputs for low-skilled labor, which is almost absent in the case of high-skilled labor. Trade-induced changes in the composition of aggregate output tend to mitigate these effects, due to the relatively favorable export performance of low-skill intensive industries. The year-to-year variation in the low-skilled share can be attributed to input prices, biased technological progress, and trade-induced structural change in the proportion 19:77:4. For high-skilled labor and capital, the output composition effect of trade contributes about one percent. The results are robust across several specifications examined.

Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://hdl.handle.net/10.1080/15140326.2005.12040631 (text/html)
Access to full text is restricted to subscribers.

Related works:
Journal Article: Technology, Trade, and Income Distribution in West Germany: A Factor-Share Analysis, 1976-1994 (2005)
Journal Article: Technology, trade, and income distribution in West Germany: A factor-share analysis, 1976-1994 (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:recsxx:v:8:y:2005:i:2:p:321-345

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/recs20

DOI: 10.1080/15140326.2005.12040631

Access Statistics for this article

Journal of Applied Economics is currently edited by Jorge M. Streb

More articles in Journal of Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().