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SKILL-BIASED TECHNOLOGICAL CHANGE (2) answer(s).
 
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ID:   187885


China's skill-biased imports / Li, Hongbin   Journal Article
Li, Hongbin Journal Article
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Summary/Abstract China has witnessed rapid increases in the skill premium over the last few decades. In this paper, we study the short-run effect of capital goods imports on skill premium in China. The surge in capital goods imports, which embody advanced technology, can explain the rising demand for skill in China. We exploit regional variations in capital goods import exposure stemming from initial differences in import structure and instrument for the capital goods import growth using exchange rate movements. A city at the 75th percentile of the distribution of capital goods imports growth has a higher skill premium by 5 percentage points (0.38 standard deviation) over the one at the 25th percentile. To explore the underlying mechanism, we provide firm-level evidence and show that imported capital goods are skill-complementary.
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2
ID:   152514


Did international outsourcing cause the increase in China's skill premium? / Wang, Jun   Journal Article
Wang, Jun Journal Article
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Summary/Abstract This study analyzes the transmission mechanism for the increase in the skill premium caused by international outsourcing through skill-biased technological change (SBTC). Using 2000–2013 panel data from 27 manufacturing industries in China, this study conducts both probit and Tobit tests and shows that international outsourcing led to SBTC in China's manufacturing industries. A positive correlation is found between international outsourcing and the increase in the skill premium in both static and dynamic models. For each 1-percent increase in the international outsourcing index, the skill premium will rise approximately 10 percent. This finding indicates the existence of a mechanism through which the effect of international outsourcing on the skill premium is reinforced where SBTC is occurring. However, this may enlarge wage gaps within the same industry. Therefore, China should not only use the skill premium to promote the transformation and upgrading of industries benefiting from outsourcing and optimize the structure of employment but also prevent the negative effects of an increased skill premium.
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