Global Knowledge and Local Inequality - Industry Level Evidence

Ahmed Rahman

Departmental Working Papers from United States Naval Academy Department of Economics

Abstract: This paper attempts to ascertain if skill-biased technologies developed in R&D-active countries diffuse to the rest of the world. First, using a model of international trade, I show the effects of skill-bias knowledge diffusion. The theory suggests that skill-biased technological diffusion need not increase skill premia, as sectoral biases can exert countervailing forces. Second, I test implications from the theory using United Nations industry data. Skill-biased knowledge diffusion tends to be associated with rising local skill-premia more in skill-intensive industries than unskill-intensive ones. Thus sectoral biases can help us see the extent of such technological spillovers.

Pages: 31 pages
Date: 2007-07
New Economics Papers: this item is included in nep-ino, nep-int, nep-knm and nep-tid
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