Relative wages, openness and skill-biased technological change

Standard neo-classical trade theory predicts that trade liberalisation should cause a fall in wage inequality in developing countries through a decrease in the relative demand for skilled labour. Recent studies of a number of developing countries, however, find evidence to the contrary. Using a panel of manufacturing firms in the 1990s we investigate whether skillbiased technological change induced through imports of technology-intensive capital goods or export activity may provide an explanation for the increase in relative wages of skilled workers in Ghana. Estimates of a skilled worker relative demand equation based on a translog cost function show that changes in technology through a greater inflow of foreign machinery is found to be indeed consistent with skill-biased technological change in Ghana.

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Year of publication:	2002
Authors:	Görg, Holger ; Strobl, Eric
Publisher:	Bonn : Institute for the Study of Labor (IZA)
Subject:	Lohnstruktur \| Qualifikation \| Außenhandelsliberalisierung \| Technologietransfer \| Technischer Fortschritt \| Schätzung \| Ghana \| trade liberalisation \| skill-biased technological change \| wage inequality

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Series:	IZA Discussion paper series ; 596
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	846046091 [GVK] hdl:10419/2890 [Handle]
Classification:	F14 - Country and Industry Studies of Trade ; O33 - Technological Change: Choices and Consequences; Diffusion Processes ; J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc
Source:	EconStor