Structural change, wage inequality and technology foresight policy

The thesis is organized in a set of studies divided in three chapters. Chapter 2 and 3 focus on the Argentine and Brazilian industrial development empirically and they are based on the Analysis Program of Industrial Dynamics database (PADI) (Katz and Stumpo, 2001). PADI covers 28 manufacturing sectors from 1970 to 2007 and they can be grouped into three main macro-sectors according to the most used factors of production, namely: natural resources (NR) intensive industries, labour intensive (LI) intensive industries, and R&D intensive industries. Chapter 2 investigates the direction, dynamics and productivity dispersion of structural change to provide an insight into its evolution and dynamics. Chapter 3, builds on the findings from Chapter 2 by assessing whether, and if so, to what extent, structural change – identified with productivity, gross margin, trade openness and import penetration - affects cross-sectoral wage inequality. The study underscores that the type of economic specialization of a given sector is a key element in explaining the link between structural change and wage inequality. Chapter 4, by embracing a policy perspective, asks how TF exercises can help developing countries to pursue structural change in practice. Overall our results show that structural change is driven by R&D industries in Brazil and NR intensive industries in Argentina. Furthermore, R&D intensive industries - contrary to NR intensive industries - amplify the positive relationship between structural change and higher wage premiums. Sectoral wages in this macro-sector are equally distributed, especially in Brazil. Hence, efforts to shift resources from traditional NR industries towards more technological intensive ones also thanks to the adoption of technology foresight policies are of foremost importance since they enable structural change and a more equitable growth at the same time.