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Globalization and Employment: Imported Skill Biased Technological Change in Developing Countries

Author

Listed:
  • Andrea Conte

    (Max Planck Institute of Economics Jena, Entrepreneurship, Growth and Public Policy Group)

  • Marco Vivarelli
Abstract
This paper discusses the impact of the international transfer of embodied technological change on the employment evolution of skills in a sample of low and middle income countries (LMICs). A large body of literature has already underlined the occurrence of widening wage and employment differentials between skilled and unskilled workers in high-income countries (HICs) (Katz and Autor, 1999). Such empirical evidence is consistent with both trade- and technology-based explanations while these competing theoretical frameworks predict opposite effects on within- country inequality in LMICs. Recent analytical advancements have found convergent elements between these two lines of research, especially in the prediction of the employment impact of technology transfer. However, a systematic lack of data in LMICs still hampers empirical research on the determinants of the witnessed increase in inequality in these economies. This paper provides a direct measure of technology transfer from HICs, that is from those economies which have already experienced the occurrence of skillbiased technological change, to LMICs. GMM techniques are applied to an original panel dataset comprising 28 manufacturing sectors for 23 countries over a decade. Econometric results provide direct robust evidence of the absolute skill-bias effect of technology import in LMICs which, therefore, represents an important determinant of the growing divide between skilled and unskilled workers in these countries.

Suggested Citation

  • Andrea Conte & Marco Vivarelli, 2007. "Globalization and Employment: Imported Skill Biased Technological Change in Developing Countries," Jena Economics Research Papers 2007-009, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2007-009
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    File URL: https://oweb.b67.uni-jena.de/Papers/jerp2007/wp_2007_009.pdf
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    Citations

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    Cited by:

    1. Schulte, Patrick, 2015. "Does skill-biased technical change diffuse internationally?," ZEW Discussion Papers 15-088, ZEW - Leibniz Centre for European Economic Research.
    2. Nathalie Chusseau & Joël Hellier, 2013. "Inequality in Emerging Countries," Palgrave Macmillan Books, in: Joël Hellier & Nathalie Chusseau (ed.), Growing Income Inequalities, chapter 2, pages 48-75, Palgrave Macmillan.
    3. Meschi, Elena & Taymaz, Erol & Vivarelli, Marco, 2011. "Trade, technology and skills: Evidence from Turkish microdata," Labour Economics, Elsevier, vol. 18(S1), pages 60-70.
    4. Sirine MNIF, 2016. "Skill biased technological changes: Case of the MENA Region," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(3(608), A), pages 339-350, Autumn.
    5. Paola Azar, 2020. "Politics as a determinant of primary school provision The case of Uruguay, 1914-1954," Documentos de Trabajo (working papers) 20-07, Instituto de Economía - IECON.
    6. Zouhair MRABET & Lanouar CHARFEDDINE, 2013. "Trade Liberalization, Technology Import And Employment: Evidence Of Skill Upgrading In The Tunisian Context," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 37, pages 11-36.
    7. Yen, Meng-Feng, 2013. "The Wage Premium and Market Structure: The Case of South Korea and Taiwan," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151292, Agricultural and Applied Economics Association.
    8. Sirine Mnif & Chiraz Feki & Ines Abdelkafi, 2018. "Effects of Technological Shock on Employment: Application of Structural Approach VECM," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(4), pages 1138-1153, December.
    9. Sirine MNIF, 2016. "Skill biased technological changes: Case of the MENA Region," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(608), A), pages 339-350, Autumn.
    10. Muhammad Tariq Majeed & Ronald MacDonald, 2010. "Distributional and Poverty Consequences of Globalization: A Dynamic Comparative Analysis for Developing Countries," Working Papers 2010_22, Business School - Economics, University of Glasgow.
    11. Zuniga, Pluvia & Crespi, Gustavo, 2013. "Innovation strategies and employment in Latin American firms," Structural Change and Economic Dynamics, Elsevier, vol. 24(C), pages 1-17.
    12. Facundo Alvaredo & Leonardo Gasparini, 2013. "Recent Trends in Inequality and Poverty in Developing Countries," CEDLAS, Working Papers 0151, CEDLAS, Universidad Nacional de La Plata.
    13. Aissaoui, Najeh & Ben Hassen, Lobna, 2015. "Skill-biased Technological Change, E-skills and Wage Inequality: Evidence from Tunisia," MPRA Paper 76551, University Library of Munich, Germany, revised 29 Jun 2015.
    14. repec:ipg:wpaper:2014-504 is not listed on IDEAS
    15. Lanouar Charfeddine & Zouhair Mrabet, 2015. "Trade liberalization and relative employment: further evidence from Tunisia," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 5(1), pages 173-202, June.
    16. Meschi, Elena & Vivarelli, Marco, 2007. "Globalization and Income Inequality," IZA Discussion Papers 2958, Institute of Labor Economics (IZA).
    17. Florian BUTOLLO, 2013. "Moving Beyond Cheap Labour? Industrial and Social Upgrading in the Garment and LED Industries of the Pearl River Delta," Journal of Current Chinese Affairs - China aktuell, Institute of Asian Studies, GIGA German Institute of Global and Area Studies, Hamburg, vol. 42(4), pages 139-170.
    18. Srour, Ilina & Taymaz, Erol & Vivarelli, Marco, 2013. "Skill-Biased Technological Change and Skill-Enhancing Trade in Turkey: Evidence from Longitudinal Microdata," IZA Discussion Papers 7320, Institute of Labor Economics (IZA).
    19. Sami SAAFI, 2009. "Innovations technologiques, mobilité et demande de main-d’oeuvre qualifiée. Une analyse des industries tunisiennes (Technological innovations, mobility and skilled-labour deamnd : an analysis of tunis," Working Papers 206, Laboratoire de Recherche sur l'Industrie et l'Innovation. ULCO / Research Unit on Industry and Innovation.
    20. Meschi, Elena & Vivarelli, Marco, 2009. "Trade and Income Inequality in Developing Countries," World Development, Elsevier, vol. 37(2), pages 287-302, February.
    21. Carlos Bianchi & Hugo Laguna, 2020. "Firm’s innovation strategies and employment: new evidence from Uruguay," Documentos de Trabajo (working papers) 20-06, Instituto de Economía - IECON.
    22. Ilina Srour & Erol Taymaz & Marco Vivarelli, 2014. "Globalization, Technology and Skills: Evidence from Turkish Longitudinal Microdata," ERC Working Papers 1405, ERC - Economic Research Center, Middle East Technical University, revised Jun 2014.
    23. Gianluca Grimalda & Marco Vivarelli, 2010. "Is inequality the price to pay for higher growth in middle-income countries?," Journal of Evolutionary Economics, Springer, vol. 20(2), pages 265-306, April.
    24. Sami SAAFI & Fouzi SBOUI, 2011. "LES OPPORTUNITES DES INVESTISSEMENTS DIRECTS ETRANGERS LES OPPORTUNITES DES INVESTISSEMENTS DIRECTS ETRANGERS, DIFFUSION TECHNOLOGIQUE ET DEMANDE DE LA MAIN-D’OEUVRE PAR QUALIFICATION DES INDUSTRIES T," Working Papers 240, Laboratoire de Recherche sur l'Industrie et l'Innovation. ULCO / Research Unit on Industry and Innovation.
    25. Meschi, Elena & Taymaz, Erol & Vivarelli, Marco, 2016. "Globalisation, technology and the labour market: A microeconometric analysis for Turkey," MERIT Working Papers 2016-026, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

    More about this item

    Keywords

    Skill Biased Technological Change; capital trade; GMM estimation; General Industrial Statistics; World Trade Analyzer;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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