The Endogenous Skill Bias of Technical Change and Inequality in Developing Countries

This paper draws on existing empirical literature and an original theoretical model to argue that globalization and skill supply affect the extent to which technology adoption in developing countries favors skilled workers. Developing countries are experiencing technical change that is skill-biased...

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Bibliographic Details
Main Author: Behar, Alberto
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2013
Series:IMF Working Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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245 0 0 |a The Endogenous Skill Bias of Technical Change and Inequality in Developing Countries  |c Alberto Behar 
260 |a Washington, D.C.  |b International Monetary Fund  |c 2013 
300 |a 31 pages 
651 4 |a Tunisia 
653 |a Wages, Compensation, and Labor Costs: General 
653 |a Aggregate Factor Income Distribution 
653 |a Labor Productivity 
653 |a Income inequality 
653 |a Income distribution 
653 |a Intellectual Property Rights: General 
653 |a Wages 
653 |a National accounts 
653 |a Technological Change: Choices and Consequences 
653 |a Wage Level and Structure 
653 |a Economic Development: Human Resources 
653 |a Labor Demand 
653 |a Technological Change 
653 |a Technology 
653 |a General issues 
653 |a Human Capital 
653 |a Skills 
653 |a Occupational Licensing 
653 |a Occupational Choice 
653 |a Professional Labor Markets 
653 |a Macroeconomics 
653 |a Diffusion Processes 
653 |a Labor market 
653 |a Human Development 
653 |a Migration 
653 |a Innovation 
653 |a Skilled labor 
653 |a Income Distribution 
653 |a Income economics 
653 |a Research and Development 
653 |a Labour 
653 |a Unskilled labor 
653 |a Wage Differentials 
653 |a Education: General 
653 |a Labor 
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520 |a This paper draws on existing empirical literature and an original theoretical model to argue that globalization and skill supply affect the extent to which technology adoption in developing countries favors skilled workers. Developing countries are experiencing technical change that is skill-biased because skill-biased technologies are becoming relatively cheaper. Increased skill supply further biases technical change in favor of skilled labor. Free trade induces technology that favors skilled workers in skill-abundant developing countries and that favors unskilled workers in skill-scarce developing countries, and therefore amplifies the predicted wage effects of trade liberalization. These features aid our understanding of the observed rises in inequality within developing countries and the absence of a significant downward effect of expanded educational attainment on skill premia. They also help account for the large and differential effects of trade liberalization on inequality. These findings are pertinent for the Middle East and North Africa because of its recent increase in trade openness and remarkable rise in educational attainment