ICT,offshoring, and the demand for part-time workers: The case of Japanese manufacturing

This paper examines the effects of information and communication technology (ICT) and offshoring on the skill demand in Japanese manufacturing. One of the contributions of this paper is that we focus explicitly on the demand for low-wage part-time workers, which we call low skilled workers. Estimating a system of variable factor demands for the period 1980–2011, we find that industries with higher ICT stock shifted demand from middle-low to middle-high and low skilled workers. Offshoring is associated with the increasing demand for high skilled workers but it has insignificant effects on the demand for middle-high, middle-low, and low skilled workers. The results together suggest that the increasing demand for low-wage part-time workers can be attributable to ICT in Japan.     

Are multinationals exporting jobs? The case of Taiwan

Does offshore production always result in job exportation? Using firm‐level data for Taiwanese multinationals that allow us to avoid reverse causality issues, this paper finds that while increasing offshore production has a negative impact on the demand for domestic manufacturing workers, this is not the case for domestic research and development workers who are often more skilled. The results also suggest that for Taiwan, there is geographical fragmentation of production activities in such a way that more skilled jobs are maintained domestically and less‐skilled jobs are exported to other developing countries. These findings confirm the prediction of the knowledge‐capital model.     

The Lost Race between Schooling and Technology

We study the evolution of wage inequality between skilled and unskilled workers in the Netherlands for the years 1969-2020. Our analysis is based on estimates of the production structure in the Netherlands, projections of the relative supply of skilled workers, and projections regarding shifts in relative demand for skilled workers. Wage inequality will increase under plausible assumptions because relative demand for skilled workers will increase more rapidly than the relative supply of skilled workers. We study the potential of education subsidies to higher education in order to stimulate the supply of skilled workers thereby off-setting the increase in projected wage inequality. Our findings suggest that education subsidies are not very effective in combatting increases in wage inequality.     

产业结构调整下的广州市技能人才需求预测分析

金融危机对广州的传统制造业产生了较大的冲击,调整产业结构,提升创新能力是当前摆脱危机,实现经济新一轮增长的重要途径。在此过程中,技能人才的供给是广州三次产业战略调整的直接制约因素。尤其随着广州产业结构调整节奏的逐步加快,其对技能人才的市场需求将与三次产业的产值结构相匹配而趋于刚性。因此,合理预测广州三次产业发展中对技能人才的需求,增加技能人才的供给能力,是广州产业结构调整中的重要问题。     

Openness, Technological Change and Labour Demand in Pre-Crisis Indonesia

This paper examines the impact of export orientation, import competition, foreign ownership and the rate of capital accumulation on the relative demand for skilled and unskilled labour in pre-crisis Indonesia. Estimates from an interrelated factor demand analysis indicate that openness and foreign ownership, by themselves, acted to raise the relative demand for unskilled workers in the pre-crisis period, while the newness of capital was associated with increased relative demand for skilled workers. Overall, the relative demand for unskilled workers increased yet their relative wage position weakened. These contrasting relative employment and wage changes are consistent with the examined demand shocks and the greater elasticity of supply of Indonesian unskilled relative to skilled labour.     

IMPORTED SKILL‐BIASED TECHNOLOGICAL CHANGE IN DEVELOPING COUNTRIES

This paper discusses the occurrence of skill‐enhancing technology import, namely, the relationship between imports of embodied technology and widening skill‐based employment differentials in low‐ and middle‐income countries. Generalized method of moments (GMM) techniques are applied to an original panel dataset comprising 28 manufacturing sectors for 23 countries over a decade. Econometric results provide robust evidence of the determinants of widening employment differentials in low‐ and middle‐income countries. In particular, the proposed empirical evidence indicates capital–skill complementarity as a possible source of skill bias, while imported skill‐enhancing technology emerges as an additional driver of increasing demand for the skilled workers in these countries.     

TECHNOLOGICAL CHANGE AND DEMAND FOR SKILLS IN DEVELOPING COUNTRIES: AN EMPIRICAL INVESTIGATION OF THE REPUBLIC OF KOREA'S CASE

There are few studies that directly address the upskilling issues in developing countries. Since theoretical analyses of these issues usually yield different results, upskilling in developing counties, and the factors of upskilling, if any, are rather empirical questions. This study shows that upskilling that occurs in developed countries in terms of the ratio of the number of white‐collar workers to that of blue‐collar workers also occurred in the Republic of Korea, one of developing countries. Increasing demand for highly‐skilled workers reflected in their employment and wage shares can be largely explained by “within industry’ shifts, not by “between industry” shifts, especially in the manufacturing industry. To further investigate the causes of these shifts, changes in white‐collar shares are regressed on the capital‐output and R&D‐sales ratio. Estimated coefficients are all positive, suggesting capital‐skill complementarities and skill‐biased technological change.     

Two-dimensional analysis of the impact of outward FDI on performance at home: Evidence from Japanese manufacturing firms

This paper empirically investigates two dimensions of changes in firm behavior and performance before and after foreign direct investment (FDI). The first dimension is the difference between vertical and horizontal FDI. The second dimension is the effect of outward FDI on firms’ production and non-production activities in the home country. In our careful empirical analysis we use the propensity score matching method to show that the impact of outward FDI differs by dimension, that is, by FDI type and firms’ production and non-production activities. In particular, while horizontal FDI increases demand for non-production workers, vertical FDI increases demand for skilled production workers.     

Job destruction and creation: Labor reallocation entailed by the clean air action in China

Understanding the mechanism of labor reallocation during the implementation of environmental regulations is important for countries to stabilize employment. Using city-level data and listed firm-level data from 2005 to 2019, we investigated the labor reallocation entailed by the Clean Air Action (CAA) from 2013 to 2017 in China, and found that the CAA substantially reduced labor demand in regulated cities and listed firms. Notably, the CAA has entailed different levels of job destruction and job creation across time, industries, and firm types, boosting labor reallocation. Firstly, the effect of the CAA on labor demand was time-varying, as labor demand first decreased and then recovered from 2013 to 2019. Secondly, the CAA generated a greater job destruction in polluting industries and their downstream industries, and job creation in clean industries. Lastly, thanks to the CAA firms have increased the hiring of highly skilled workers, although equipment upgrades have reduced labor demand, especially in polluting firms.     

Do E‐verify mandates improve labor market outcomes of low‐skilled native and legal immigrant workers?

We examine the impact of the 2007 Legal Arizona Workers Act (LAWA) on employment outcomes of low‐skilled legal workers. We use the synthetic control method to select a group of states against which the labor market trends of Arizona can be compared. Our results suggest that contrary to its intent, LAWA does not appear to have improved labor market outcomes of legal low‐skilled workers who compete with unauthorized immigrants, the target of the legislation. In fact, we find some evidence of diminished employment and increased unemployment among legal low‐skilled workers in Arizona. These findings are concentrated on the largest demographic group of workers—non‐Hispanic white men. While they are less likely to find employment, those who do have on average higher earnings as a result of LAWA. The pattern of results points to both labor supply and labor demand contractions due to LAWA, with labor supply dominating in terms of magnitude.     

The effect of immigration quotas on the average quality of migrating labor and income distribution

In this paper, the authors develop "a simple two-country, single-period model to study the effect of quota restrictions on the composition of migrating labor. [They] have divided the migrant population in two general categories called high skilled and low skilled and have shown that free migration of any category of labor occurs if and only if the country's share of world resources is different from its share of the world labor endowment in that category." Two possible outcomes, given differing labor endowments and income differentials, are considered. The potential effect of illegal immigration is also noted. The authors conclude that their model "is applicable not only to 'brain drain' problems, but also to guest worker programs and/or the mass migration of low skilled workers from poor countries to rich countries."     

Earnings Differentials Determinants Between Skills in the Malaysian Manufacturing Sector

The Malaysian manufacturing sector has been experiencing a gradual change in its production process as it shifts from labor-intensive to more capital-intensive techniques. This has led to a change in the skills required by the industries where skilled workers are in greater demand and where the wage ratio between skills favors the skilled workers. There are many factors that can influence an indi-vidual's earnings. These include educational attainment, job location, types of industries and sex. This paper attempts to measure the determinants of earnings differentials among skilled, semi-skilled and unskilled workers in the Malaysian manufacturing sector. The analysis is based on a survey of 2065 workers in six major industries conducted in 1999. These are the electrical and electronics, textile, wood-based, transport equipment, food and chemical industries. The determin-ants of earnings differentials are obtained by using the coefficients of the earnings functions. These factors are decomposed into several categories, namely human capital, individual characteristics and the residual. The results reveal that human capital variables, which comprise education, training and experience, play a significant role in determining the earnings differentials, particularly between skilled and semi-skilled workers and between semi-skilled and unskilled workers.     

Inward FDI and demand for skills in manufacturing firms in Sweden

We observe a substantial increase in foreign ownership in Sweden in the 1990s. Did that have any effect on relative demand for skilled labor? Has technology transfers—often associated with inward FDI—led to an increased demand for skills due to skilled-biased technical change? Are there any grounds for the concerns in the public Swedish debate that more skilled activities have been moved to other countries where the headquarters are located? Estimating relative labor demand at the firm level and using propensity score matching with difference-in-difference estimation, we obtain support for that relative demand for skilled labor tend to rise in non-multinationals (non-MNEs)—but not in multinationals (MNEs)—that become foreign-owned. Other interesting findings are that larger presence of foreign MNEs in an industry appears to have a positive impact on the relative demand for skills in Swedish MNEs within the same industry and that the elasticity of substitution between skilled and less-skilled labor seems to be lower in MNEs than in non-MNEs.     

What’s trade got to do with it? Relative demand for skills within Swedish manufacturing

What’s Trade Got to Do with It? Relative Demand for Skills within Swedish Manufacturing. — This paper seeks to identify the contribution of trade and technological change to the increase in inequality between skilled and unskilled workers in Sweden since the 1970s. An empirical approach is adopted which allows for the outsourcing of the low-skill parts of the production chain to low-wage locations and is applied to detailed industry and bilateral trade data, the latter distinguishing between low-wage sources of imports and OECD countries. The paper finds that, in contrast to previous studies, trade with low-wage countries may have contributed to the rise in inequality in Swedish manufacturing. The empirical results also suggest that the increased use of technology also played a role in creating greater inequality between skilled and unskilled workers in Sweden, with the magnitude of this impact increasing in the 1990s.     

Do Foreign Firms Transfer Gender Norms in the Labour Market? Evidence from Sub-Saharan Africa

Closing the gender gaps in economic opportunities is crucial for boosting economic growth and the empowerment of women. In this paper, we study how foreign firms contribute in reducing gender disparities in the labour market by transferring the gender norms of their country of origin to the affiliates in the host countries. We use cross sectional data on foreign firms located in 19 Sub Saharan Africa countries in 2010 by UNIDO. We find that firms coming from more gender equal countries employ more female workers in their affiliates. This effect is more relevant for the highly skilled female workers.     

Global Outsourcing and Wage Inequality in Middle-Income Countries: Evidence from South Korea

A substantial number of studies have suggested that global outsourcing can induce wage inequality. As Feenstra and Hanson [(1996a) Foreign investment, outsourcing, and relative wage, in: R. C. Feestra, G. M. Hanson, and D. A. Irwin (Eds.) Political Economy of Trade Policy: Essays in Honor of Jagdish Bhagwati (Cambridge: The MIT Press), pp. 89–127] argued, global outsourcing is comparable to skill-biased technological change in that global outsourcing is more likely to increase the wage of skilled workers rather than their unskilled counterparts. We examine the effects of outsourcing on wage of skilled and unskilled workers in Korea's manufacturing sector with a focus on the dissimilar effects of outsourcing to developed countries (DCs) and less developed countries (LDCs) on relative wage. The results of system and difference GMM estimation based on manufacturing data from 1992 to 2006 indicate that outsourcing to DCs and LDCs have opposite (and significant) effects on relative wage, that is, outsourcing to DCs (LDCs) decreases the wage of skilled (unskilled) workers.     

标准化生产、最优知识产权保护和内生增长

本文在Acemoglu et al.(2010)的基础上建立了一个动态一般均衡模型,其中产品周期分为创新和标准化两个阶段——刚创新出来的产品只能由高技能劳动力生产,而将其标准化之后就可以由工资较低的低技能劳动力生产。尽管标准化之后生产成本更低,但也更易为竞争对手模仿。知识产权保护可以缓解企业在创新和标准化决策之间的困境。本文模型对内生增长理论和国际贸易理论提供了更新的研究方法,并得到结论:一、本文模型丰富了内生增长理论;二、本文从新的角度解释了为什么南方国家的知识产权保护要弱于北方国家;三、知识产权保护越弱越会伤害低技能工人的利益,加剧工资不平等。     

Trade liberalization and wage inequality: Evidence from Korea

This paper investigates the heterogeneous income distribution effects of trade liberalization using Korean survey data from years of 2000–2015. Following the Stolper-Samuelson theorem most of previous research studying the effects of trade liberalization on wage differences focus on workers’ characteristics (e.g., skilled or unskilled) while heterogeneity within the same worker group has not been yet substantially investigated. To fill this gap, this paper provides empirical evidence of wage inequality across firms within the same group of workers caused by trade liberalization, potentially implied in the new-new trade models with firm heterogeneity. Employing a difference-in-differences (DID) specification, we find that the wages of unskilled workers in Korea have increased since its FTAs with more advanced countries, such as members of EU and the US, came into effect, while the effects on the wages of skilled workers are negative but not statistically significant. We also show that wage effects are heterogeneous across firms within unskilled and skilled worker groups, while the positive effects are statistically significant and largest for unskilled workers in medium-large sized firms. These findings are in line with both traditional and new-new trade models.     

Globalization and wage inequalities: A synthesis of three theories

Globalization and Wage Inequalities: A Synthesis of Three Theories. — The theoretical insights of Heckscher and Ohlin, Feenstra and Hanson, and Tang and Wood provide a plausible explanation of the effects of globalization on wage inequalities in developed and developing countries. In combination, these three theories can explain, among other things, why inequality has fallen in some developing countries but risen in others. Improved travel and communications facilities raise the relative wages of highly skilled Northern workers, but in both the North and the South have mixed effects on wage gaps between medium-skilled and unskilled workers, sometimes reinforcing and sometimes offsetting the effects of falling barriers to trade.     

Do Workers in Africa Get a Wage Premium if Employed in Firms Owned by Foreigners?

Do firms owned by foreigners pay higher wages than locally ownedfirms for apparently equivalent workers? Do such benefits accrueto all or only certain types of workers? This paper uses dataon individual wages in manufacturing industry for five Africancountries in the early 1990s to address these questions. Wepresent two main findings. First, foreign ownership is associatedwith a 20–40% increase in individual wages (conditionalon age, tenure and education) on average. This is halved to8–23% if we take into account the fact that foreign-ownedfirms are larger and locate in high-wage sectors and regions.Secondly, there is a tendency in some countries for more skilledworkers (using occupation and education categories) to benefitmore from foreign ownership than less skilled workers and thisconclusion holds after accounting for the size distributionof foreign firms. We discuss, but cannot directly test, theplausibility of two explanations for these findings: (i) foreign-ownedfirms employ technologies that are more skill-biased than technologiesin local firms and (ii) skilled workers in foreign firms aremore effective in rent-sharing than other workers. We contendthat these explanations may not be mutually exclusive and, hence,cannot be empirically distinguished.