The Elasticity Of Substitution Between Skilled And Unskilled Labor In Developing Countries A Directed Technical Change Perspective

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The Elasticity of Substitution Between Skilled and Unskilled Labor in Developing Countries: A Directed Technical Change Perspective

Author : Mr. Alberto Behar
Publisher : International Monetary Fund
ISBN 13 :
Total Pages : 40 pages
Book Rating : 4.4/5 (2 download)

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Book Synopsis The Elasticity of Substitution Between Skilled and Unskilled Labor in Developing Countries: A Directed Technical Change Perspective by : Mr. Alberto Behar

Download or read book The Elasticity of Substitution Between Skilled and Unskilled Labor in Developing Countries: A Directed Technical Change Perspective written by Mr. Alberto Behar and published by International Monetary Fund. This book was released on 2023-08-11 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: We develop a model of endogenous skill-biased technical change in developing countries. The endogenous response to a rise in skill supply counters the traditional substitution effect and dampens its role in reducing wage inequality. The model re-enforces consensus estimates of the elasticity of substitution between more/less educated workers by reconciling dispersed existing estimates. It also rationalizes estimates that were hitherto deemed implausible or model-inconsistent. We produce new estimates for developing countries with a novel global panel (finding values at or just above 2) and with Latin American data that facilitates analysis of dynamics (which reduce estimates to 1.7-1.8). We therefore shed new light on a parameter that is crucial for inequality, growth, and other key macroeconomic questions.

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

Author : Mr.Alberto Behar
Publisher : International Monetary Fund
ISBN 13 : 147553695X
Total Pages : 31 pages
Book Rating : 4.4/5 (755 download)

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Book Synopsis The Endogenous Skill Bias of Technical Change and Inequality in Developing Countries by : Mr.Alberto Behar

Download or read book The Endogenous Skill Bias of Technical Change and Inequality in Developing Countries written by Mr.Alberto Behar and published by International Monetary Fund. This book was released on 2013-02-26 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Directed Technical Change

Author : Daron Acemoglu
Publisher :
ISBN 13 :
Total Pages : 60 pages
Book Rating : 4.:/5 (248 download)

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Book Synopsis Directed Technical Change by : Daron Acemoglu

Download or read book Directed Technical Change written by Daron Acemoglu and published by . This book was released on 2001 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: For many problems in macroeconomics, development economics, labor economics, and international trade, whether technical change is biased towards particular factors is of central importance. This paper develops a simple framework to analyze the forces that shape these biases. There are two major forces affecting equilibrium bias: the price effect and the market size effect. While the former encourages innovations directed at scarce factors, the latter leads to technical change favoring abundant factors. The elasticity of substitution between different factors regulates how powerful these effects are, and this has implications about how technical change and factor prices respond to changes in relative supplies. If the elasticity of substitution is sufficiently large, the long-run relative demand for a factor can slope up. I apply this framework to discuss a range of issues including: Why technical change over the past 60 years was skill-biased, and why the skill bias may have accelerated over the past twenty-five years. Why new technologies introduced during the late eighteenth and early nineteenth centuries were unskill-biased. Why biased technical change may increase the income gap between rich and poor countries. Why international trade may induce skill-biased technical change. Why a large wage-push, as in continental Europe during the 1970s, may cause capital-biased technical change. Why technical change may be generally labor-augmenting rather than capital-augmenting

Increasing Wage Inequality in Developed Countries

Author :
Publisher :
ISBN 13 :
Total Pages : 100 pages
Book Rating : 4.3/5 (91 download)

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Book Synopsis Increasing Wage Inequality in Developed Countries by :

Download or read book Increasing Wage Inequality in Developed Countries written by and published by . This book was released on 2003 with total page 100 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Technological Changes, Offshoring, and the Labor Share

Author : Weicheng Lian
Publisher : International Monetary Fund
ISBN 13 : 1498316816
Total Pages : 57 pages
Book Rating : 4.4/5 (983 download)

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Book Synopsis Technological Changes, Offshoring, and the Labor Share by : Weicheng Lian

Download or read book Technological Changes, Offshoring, and the Labor Share written by Weicheng Lian and published by International Monetary Fund. This book was released on 2019-07-02 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: Existing studies on the downward trend in the labor share of income mostly focus on changes within individual countries. I document, however, that half of the global decline in the labor share of income can be traced to the relocation of activities between countries. I develop a two-country model to show that when the relative price of investment goods falls, production activities with a small elasticity of substitution between capital and labor tend to get offshored from high- to low-wage countries. The model provides an explanation as to why such relocation may drive the labor share down in both developed and developing economies, as well as globally.

Inequality and the Labor Market

Author : Sharon Block
Publisher : Brookings Institution Press
ISBN 13 : 0815738811
Total Pages : 263 pages
Book Rating : 4.8/5 (157 download)

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Book Synopsis Inequality and the Labor Market by : Sharon Block

Download or read book Inequality and the Labor Market written by Sharon Block and published by Brookings Institution Press. This book was released on 2021-04-06 with total page 263 pages. Available in PDF, EPUB and Kindle. Book excerpt: Exploring a new agenda to improve outcomes for American workers As the United States continues to struggle with the impact of the devastating COVID-19 recession, policymakers have an opportunity to redress the competition problems in our labor markets. Making the right policy choices, however, requires a deep understanding of long-term, multidimensional problems. That will be solved only by looking to the failures and unrealized opportunities in anti-trust and labor law. For decades, competition in the U.S. labor market has declined, with the result that American workers have experienced slow wage growth and diminishing job quality. While sluggish productivity growth, rising globalization, and declining union representation are traditionally cited as factors for this historic imbalance in economic power, weak competition in the labor market is increasingly being recognized as a factor as well. This book by noted experts frames the legal and economic consequences of this imbalance and presents a series of urgently needed reforms of both labor and anti-trust laws to improve outcomes for American workers. These include higher wages, safer workplaces, increased ability to report labor violations, greater mobility, more opportunities for workers to build power, and overall better labor protections. Inequality in the Labor Market will interest anyone who cares about building a progressive economic agenda or who has a marked interest in labor policy. It also will appeal to anyone hoping to influence or anticipate the much-needed progressive agenda for the United States. The book's unusual scope provides prescriptions that, as Nobel Laureate Joseph Stiglitz notes in the introduction, map a path for rebalancing power, not just in our economy but in our democracy.

Skilled and Unskilled Labor are Less Substitutable Than Commonly Thought

Author : Tomáš Havránek
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (119 download)

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Book Synopsis Skilled and Unskilled Labor are Less Substitutable Than Commonly Thought by : Tomáš Havránek

Download or read book Skilled and Unskilled Labor are Less Substitutable Than Commonly Thought written by Tomáš Havránek and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: A key parameter in the analysis of wage inequality is the elasticity of substitution between skilled and unskilled labor. We question the common view that the elasticity exceeds 1. Two biases, publication and attenuation, conspire to pull the mean elasticity reported in the literature to 1.9. After correcting for the biases, the literature is consistent with the elasticity in the US of 0.6-0.9. Our analysis relies on 729 estimates of the elasticity collected from 76 studies as well as 37 controls that reflect the context in which the estimates were obtained. We use recently developed nonlinear techniques to correct for publication bias and employ Bayesian and frequentist model averaging to address model uncertainty. Our results suggest that, first, insignificant estimates of the elasticity are underreported. Second, because researchers typically estimate the elasticity's inverse, measurement error exaggerates the elasticity, and we show the exaggeration is substantial. Third, elasticities are systematically larger for developed countries, translog estimation, and methods that ignore endogeneity.

Technology Transfer and Wage Inequality

Author : Wipas Sarutpong
Publisher :
ISBN 13 :
Total Pages : 112 pages
Book Rating : 4.:/5 (318 download)

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Book Synopsis Technology Transfer and Wage Inequality by : Wipas Sarutpong

Download or read book Technology Transfer and Wage Inequality written by Wipas Sarutpong and published by . This book was released on 2000 with total page 112 pages. Available in PDF, EPUB and Kindle. Book excerpt: Presents the new approach to understanding the effects of technology transfer of the developing countries by using imitation-driven growth model to analyze the effects of the imitation on level of technology, demand for skilled labor, the output growth and especially relative wage of the host country.

Implications of Skill-biased Technological Change

Author : Eli Berman
Publisher :
ISBN 13 :
Total Pages : 52 pages
Book Rating : 4.F/5 ( download)

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Book Synopsis Implications of Skill-biased Technological Change by : Eli Berman

Download or read book Implications of Skill-biased Technological Change written by Eli Berman and published by . This book was released on 1997 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: Demand for less skilled workers decreased dramatically in the US and in other developed countries over the past two decades. We argue that pervasive skill-biased technological change rather than increased trade with the developing world is the principal culprit. The pervasiveness of this technological change is important for two reasons. First, it is an immediate and testable implication of technological change. Second, under standard assumptions, the more pervasive the skill-biased technological change the greater the increase in the embodied supply of less skilled workers and the greater the depressing effect on their relative wages through world goods prices. In contrast, in the Heckscher-Ohlin model with small open economies, the skill-bias of local technological changes does not affect wages. Thus, pervasiveness deals with a major criticism of skill-biased technological change as a cause. Testing the implications of pervasive, skill-biased technological change we find strong supporting evidence. First, across the OECD, most industries have increased the proportion of skilled workers employed despite rising or stable relative wages. Second, increases in demand for skills were concentrated in the same manufacturing industries in different developed countries.

Skill-Biased Technological Change, Unemployment and Brain Drain

Author : Karin Mayr-Dorn
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Skill-Biased Technological Change, Unemployment and Brain Drain by : Karin Mayr-Dorn

Download or read book Skill-Biased Technological Change, Unemployment and Brain Drain written by Karin Mayr-Dorn and published by . This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We develop a model of directed technology adoption, frictional unemployment, and migration to examine the effects of a change in skill endowments on the wages, employment rates, and emigration rates of skilled and unskilled workers. We find that, depending on the elasticity of substitution between skilled and unskilled workers and the elasticity of the matching function, an increase in the skill ratio can reduce both the relative unemployment rate and the relative emigration rate (brain drain) of skilled workers. We provide numerical simulations to support our findings and show that the effects are empirically relevant and potentially sizable.

Mobilization of Low Skilled Labor and Wage Inequality

Author :
Publisher :
ISBN 13 :
Total Pages : 122 pages
Book Rating : 4.:/5 (914 download)

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Book Synopsis Mobilization of Low Skilled Labor and Wage Inequality by :

Download or read book Mobilization of Low Skilled Labor and Wage Inequality written by and published by . This book was released on 2015 with total page 122 pages. Available in PDF, EPUB and Kindle. Book excerpt: The thesis explores the role of technology in some of the most important economic phenomena of the last decades and examines how changes in the state of the economy could in uence the nature of technology. In the rst chapter I study the relation between supply of skilled labor, rms' choice of optimal technology and wage inequality. Researchers have acknowledged that one of the key causes of the increase in inequality across OECD countries was the introduction of skill-biased production methods, which generated a higher demand for skilled workers. In the chapter, I explore whether the shift to skill-biased production method was a consequence of changing nature of new global technological paradigm (speci cally, the arrival of the information technology) or a consequence of rms' choice to exploit the new technological paradigm in a way that favors skilled workers. Such choice could be motivated by a rapid increase in availability of college graduates in 70s and 80s. To study these questions, I rst observe that while the source of the latter cause is global, the source of the former rests in labor market conditions at the country level. Hence panel data estimators could be used to disentangle the two e ects. I nd that endogenous technology choice at the local level can explain 30% of the increase of the college premium in the OECD countries. The second chapter studies how the rate and direction of technological change is in uenced by the parameters of consumers' preferences. I demonstrate that the elasticity of substitution between goods in the Dixit-Stiglitz framework can be represented as a simple linear function of a taste heterogeneity measure. I combine this result with Young's model of endogenous growth, which predicts that the speed of technological progress depends positively on the elasticity of substitution between goods. The purpose of the third chapter is to summarize the convergence of Central and Eastern European to Western European economies in the period between 1995 and 2007. 1 I decomposes growth of relative output into growth of capital, labor input, human capital and TFP. I nd the evidence for the massive contribution of TFP convergence in the GDP convergence.

Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality

Author : Daron Acemoglu
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality by : Daron Acemoglu

Download or read book Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality written by Daron Acemoglu and published by . This book was released on 2003 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: I consider an economy where skilled and unskilled workers use different technologies. The rate of improvement of each technology is determined by a profit-maximizing R&D sector. When there is a high proportion of skilled workers in the labor force, the market for skill-complementary technologies is larger and more effort will be spent in upgrading the productivity of skilled workers. An implication of this theory is that when the relative supply of skilled workers increases exogenously, the skill premium decreases in the short-run, but then increases, possibly even above its initial value, because the larger market for skill-complementary technologies has changed the direction of technical change. This suggests that the rapid increase in the proportion of college graduates in the U.S. labor force may have been causal in both the decline in the college premium during the 1970s and the large increase in inequality during the 1980s. The paper also derives implications of directed technical change for residual wage inequality and shows that calculations of the impact of international trade on inequality that ignore the change in the direction of technical progress may be misleading.

The Stolper-Samuelson Theorem

Author : Alan V. Deardorff
Publisher : University of Michigan Press
ISBN 13 : 9780472105335
Total Pages : 408 pages
Book Rating : 4.1/5 (53 download)

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Book Synopsis The Stolper-Samuelson Theorem by : Alan V. Deardorff

Download or read book The Stolper-Samuelson Theorem written by Alan V. Deardorff and published by University of Michigan Press. This book was released on 1994 with total page 408 pages. Available in PDF, EPUB and Kindle. Book excerpt: Collects the original Stolper-Samuelson article and most significant later contributions that interpret, extend, and test the basic result

The Economic and Fiscal Consequences of Immigration

Author : National Academies of Sciences, Engineering, and Medicine
Publisher : National Academies Press
ISBN 13 : 0309444454
Total Pages : 643 pages
Book Rating : 4.3/5 (94 download)

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Book Synopsis The Economic and Fiscal Consequences of Immigration by : National Academies of Sciences, Engineering, and Medicine

Download or read book The Economic and Fiscal Consequences of Immigration written by National Academies of Sciences, Engineering, and Medicine and published by National Academies Press. This book was released on 2017-07-13 with total page 643 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Economic and Fiscal Consequences of Immigration finds that the long-term impact of immigration on the wages and employment of native-born workers overall is very small, and that any negative impacts are most likely to be found for prior immigrants or native-born high school dropouts. First-generation immigrants are more costly to governments than are the native-born, but the second generation are among the strongest fiscal and economic contributors in the U.S. This report concludes that immigration has an overall positive impact on long-run economic growth in the U.S. More than 40 million people living in the United States were born in other countries, and almost an equal number have at least one foreign-born parent. Together, the first generation (foreign-born) and second generation (children of the foreign-born) comprise almost one in four Americans. It comes as little surprise, then, that many U.S. residents view immigration as a major policy issue facing the nation. Not only does immigration affect the environment in which everyone lives, learns, and works, but it also interacts with nearly every policy area of concern, from jobs and the economy, education, and health care, to federal, state, and local government budgets. The changing patterns of immigration and the evolving consequences for American society, institutions, and the economy continue to fuel public policy debate that plays out at the national, state, and local levels. The Economic and Fiscal Consequences of Immigration assesses the impact of dynamic immigration processes on economic and fiscal outcomes for the United States, a major destination of world population movements. This report will be a fundamental resource for policy makers and law makers at the federal, state, and local levels but extends to the general public, nongovernmental organizations, the business community, educational institutions, and the research community.

Global Economic Prospects 2006

Author :
Publisher : World Bank Publications
ISBN 13 : 082136345X
Total Pages : 182 pages
Book Rating : 4.8/5 (213 download)

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Book Synopsis Global Economic Prospects 2006 by :

Download or read book Global Economic Prospects 2006 written by and published by World Bank Publications. This book was released on with total page 182 pages. Available in PDF, EPUB and Kindle. Book excerpt: International migration, the movement of people across international boundaries to improve economic opportunity, has enormous implications for growth and welfare in both origin and destination countries. An important benefit to developing countries is the receipt of remittances or transfers from income earned by overseas emigrants. Official data show that development countries' remittance receipts totaled 160 billion in 2004, more than twice the size of official aid. This year's edition of Global Economic Prospects focuses on remittances and migration. The bulk of the book covers remittances.

Globalization and Development

Author : José Antonio Ocampo
Publisher : Stanford University Press
ISBN 13 : 9780804749565
Total Pages : 238 pages
Book Rating : 4.7/5 (495 download)

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Book Synopsis Globalization and Development by : José Antonio Ocampo

Download or read book Globalization and Development written by José Antonio Ocampo and published by Stanford University Press. This book was released on 2003 with total page 238 pages. Available in PDF, EPUB and Kindle. Book excerpt: Globalization and Development draws upon the experiences of the Latin American and Caribbean region to provide a multidimensional assessment of the globalization process from the perspective of developing countries. Based on a study by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), this book gives a historical overview of economic development in the region and presents both an economic and noneconomic agenda that addresses disparity, respects diversity, and fosters complementarity among regional, national, and international institutions. For orders originating outside of North America, please visit the World Bank website for a list of distributors and geographic discounts at http://publications.worldbank.org/howtoorder or e-mail [email protected].

Global Economic Prospects 2007

Author : World Bank
Publisher : World Bank Publications
ISBN 13 : 0821367285
Total Pages : 216 pages
Book Rating : 4.8/5 (213 download)

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Book Synopsis Global Economic Prospects 2007 by : World Bank

Download or read book Global Economic Prospects 2007 written by World Bank and published by World Bank Publications. This book was released on 2006 with total page 216 pages. Available in PDF, EPUB and Kindle. Book excerpt: Over the next 25 years developing countries will move to center stage in the global economy. Global Economic Prospects 2007 analyzes the opportunities - and stresses - this will create. While rich and poor countries alike stand to benefit, the integration process will make more acute stresses already apparent today - in income inequality, in labor markets, and in the environment. Over the next 25 years, rapid technological progress, burgeoning trade in goods and services, and integration of financial markets create the opportunity for faster long-term growth. However, some regions, notably Africa, are at risk of being left behind. The coming globalization will also see intensified stresses on the "global commons." Addressing global warming, preserving marine fisheries, and containing infectious diseases will require effective multilateral collaboration to ensure that economic growth and poverty reduction proceed without causing irreparable harm to future generations."