This paper studies the interlinked relationship between globalization and technological upgrading in affecting employment and wages of skilled and unskilled workers in a middle income developing country. It exploits a unique longitudinal firm level database that covers all manufacturing firms in Turkey over the 1992 2001 period. Turkey is taken as an example of a developing economy that, in that period, had been technologically advancing and becoming increasingly integrated with the world market. The empirical analysis is performed at firm level within a dynamic framework using a 2+2 equations model that depicts the employment and wage trends for skilled and unskilled workers separately. In particular, the System Generalized Method of Moments (GMM SYS) procedure is applied to a panel dataset of about 15,000 firms. Our results confirm the theoretical expectation that developing countries face the phenomena of skill-biased technological change and skill enhancing trade, both leading to increasing the employment and wage gap between skilled and unskilled workers. In particular, a strong evidence of a relative skill bias emerges: both domestic and imported technologies increase the relative demand for skilled workers more than the demand for the unskilled. “Learning by exporting” also appears to have a relative skill biased impact, while FDI imply an absolute skill bias.

Meschi, E. F., Taymaz, E., Vivarelli, M., Globalization, Technological Change and Labor Demand: A Firm Level Analysis for Turkey, <<REVIEW OF WORLD ECONOMICS>>, 2016; (152): 655-680 [http://hdl.handle.net/10807/94898]

Globalization, Technological Change and Labor Demand: A Firm Level Analysis for Turkey

Meschi, Elena Francesca
Primo
;
Vivarelli, Marco
Ultimo
2016

Abstract

This paper studies the interlinked relationship between globalization and technological upgrading in affecting employment and wages of skilled and unskilled workers in a middle income developing country. It exploits a unique longitudinal firm level database that covers all manufacturing firms in Turkey over the 1992 2001 period. Turkey is taken as an example of a developing economy that, in that period, had been technologically advancing and becoming increasingly integrated with the world market. The empirical analysis is performed at firm level within a dynamic framework using a 2+2 equations model that depicts the employment and wage trends for skilled and unskilled workers separately. In particular, the System Generalized Method of Moments (GMM SYS) procedure is applied to a panel dataset of about 15,000 firms. Our results confirm the theoretical expectation that developing countries face the phenomena of skill-biased technological change and skill enhancing trade, both leading to increasing the employment and wage gap between skilled and unskilled workers. In particular, a strong evidence of a relative skill bias emerges: both domestic and imported technologies increase the relative demand for skilled workers more than the demand for the unskilled. “Learning by exporting” also appears to have a relative skill biased impact, while FDI imply an absolute skill bias.
Inglese
Meschi, E. F., Taymaz, E., Vivarelli, M., Globalization, Technological Change and Labor Demand: A Firm Level Analysis for Turkey, <>, 2016; (152): 655-680 [http://hdl.handle.net/10807/94898]
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/10807/94898
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