Manufacturing skill-biased wage inequality, natural resources and institutions

Nuno Torres, Oscar Afonso and Isabel Soares ()
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Isabel Soares: CEF.UP and FEP, Universidade do Porto

CEF.UP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: We use an extensive dataset on occupational wages to measure the manufacturing skill premium and evaluate the importance of the main drivers in literature plus the effects of natural resources and institutions. Results, regarding a panel of 21 countries between 1987 and 2003, suggest the manufacturing skill premium of technologically advanced countries: (i) increases with tertiary enrolment, net FDI and the quality of governing institutions; (ii) decreases with the centralization of wage negotiations and the use of unskilled workers by geographically-diffuse natural resource re-exportation activities. In less advanced countries, the skill premium: (iii) augments with net FDI, scale effects, the centralization of wage negotiations, and scarcity of skilled workers absorbed by concentrated resource activities; (iv) decreases with trade, the use of unskilled workers by diffuse resource exploration, and the emergence of national low-end technological industrial sectors paying less for skilled labor than more advanced and predominant foreign-led industrial sectors.

Keywords: Wage inequality; Economic growth; Natural resources; Institutions; Worldwide study; Panel data. (search for similar items in EconPapers)
JEL-codes: C23 J31 O13 O50 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2013-02
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Related works:
Journal Article: Manufacturing Skill-biased Wage Inequality, Natural Resources and Institutions (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:por:cetedp:1303

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