Globalization, technological change and labor demand: a firm-level analysis for Turkey

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2016-11-01

Author

MESCHİ, Elena
Taymaz, Erol
VİVARELLİ, Marco

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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

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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 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.

Subject Keywords

Skill-biased technological change, International technology transfer, GMM-SYS

URI

https://hdl.handle.net/11511/49238

Journal

REVIEW OF WORLD ECONOMICS

DOI

https://doi.org/10.1007/s10290-016-0256-y

Collections

Department of Economics, Article

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Citation Formats

E. MESCHİ, E. Taymaz, and M. VİVARELLİ, “Globalization, technological change and labor demand: a firm-level analysis for Turkey,” REVIEW OF WORLD ECONOMICS, pp. 655–680, 2016, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/49238.