Skill Upgrading and the Real Exchange Rate

This paper examines the effect of changes in the real exchange rate on skill upgrading in the case of Chile. Using plant‐level data from the manufacturing sector, we find that a real depreciation increases the share of skilled workers in the total wage bill in exporters but not in non‐exporters. This result suggests that depreciations or, more generally, increases in export profitability, may induce exporters to adopt more skill‐intensive technologies. This finding gives support to recent models of trade that highlight the possible effect of the real exchange rate on skill upgrading and wage inequality. This paper also finds that real depreciations increase plants’ export intensity, suggesting that skill upgrading for firms that are already exporters is the channel through which real exchange depreciations affect wage inequality.     

Preference heterogeneity, wage inequality, and trade

We consider individuals who value product variety, and who can be skilled or unskilled as workers. Skilled people prefer to consume skill-intensive goods. We show that under plausible conditions an increase in the relative size of the skilled population increases the relative wage of skilled workers, thereby increasing wage inequality. In our two-country model of trade, an increase in the relative supply of skilled labor in either country increases the relative wage of skilled workers, and hence increases inequality in both countries.     

资本回报率、人力资本投资与收入不平等——基于Galor-Zeira模型的扩展

资本回报率下降对人力资本投资、收入不平等程度有较大影响。本文将可变资本回报率加入Galor-Zeira模型,理论推导发现:收入不平等陷阱并非不可逾越的障碍。当技能劳动力工资高于受教育固定成本时,随着资本回报率下降,接受教育的遗赠临界水平将降低,更多家庭将发现投资人力资本是有利的,稳态的技能劳动力比例将提高。在当前资本回报率下降的大背景下,提高技能劳动力工资、降低受教育成本、对教育贷款实施财政减免优惠、为农村中等教育支出减负和提升农村教育质量、倡导节俭和重视遗赠的文化氛围在长期都有助于提高技能劳动力比重以及缓和收入不平等。     

Foreign Direct Investment,Productivity, Demand for Skilled Labour and Wage Inequality: An Analysis of Uruguay

This study seeks to identify the causal effects of foreign ownership on productivity, the demand for skilled labour and wage inequality. With this aim, we use differences‐in‐differences techniques for a panel of Uruguayan manufacturing firms in the period 1997–2005. Our results seem to indicate that FDI causes higher productivity and increased demand for skilled labour. Furthermore, although average wages are higher in foreign‐owned firms than in domestic ones, the wage gap between skilled and unskilled workers is wider. It follows that promoting foreign investment enhances productivity. In addition, due to the greater demand for skilled workers, policies such as training schemes would be conducive to raising productivity still further, while other social policies could help to mitigate the wage inequality effects.     

Globalisation and Inter‐occupational Inequality: Empirical Evidence from OECD Countries

How does globalisation affect inter‐occupational wage inequality within countries? This paper examines this by focusing on two dimensions of globalisation: openness to trade and openness to capital flows, using a relatively new data set on occupational wages. Estimates from a dynamic model for 15 OECD countries spanning the period 1983–2003 suggest that increased openness increases occupational wage inequality in poorer OECD countries as predicted by the Heckscher–Ohlin–Samuelson model, but for the more advanced OECD countries, we find no significant effect. The absence of the expected result for the latter category can be due to a rapid increase in the supply of skilled labour, to outsourcing of skilled jobs or because changes in the trade flows are too small to have any significant effect in those countries.     

THE DOUBLE ROLE OF SKILLED LABOR,NEW TECHNOLOGIES AND WAGE INEQUALITY

We examine the relationship between the supply of skilled labor, technological change and relative wages. In accounting for the role of skilled labor in both production activities and productivity‐ enhancing ‘support’ activities we derive the following results. First, an increase in the supply of skilled labor raises the employment share of non‐production labor within firms, without lowering relative wages. Second, new technologies raise wage inequality only in so far as they give incentives to firms to reallocate skilled labor towards non‐production activities. In contrast, skill‐biased technological change of the sort usually considered in the literature does not affect wage inequality.     

Human capital and wages in exporting firms

This paper studies the link between the education level of workers, export performance and wages. We argue that firms may escape intense competition in international markets by using high skilled workers to differentiate their products. This story is consistent with our empirical results. Using a very rich matched worker-firm longitudinal dataset, we find that there is a weak negative direct effect of exporting on wages, but an interaction term between export intensity and skill intensity has a positive impact on wages. That is, we find an export wage premium, but only in firms where the skill intensity is sufficiently high.     

进出口商品结构对我国工资差距的影响

本文研究我国进出口贸易结构对技术工人与非技术工人工资差距的影响。分析发现:我国技术密集型产品的出口逐渐取代了劳动密集型产品的出口,出口商品结构的改善加大了对技术工人的相对需求,扩大了我国技术工人与非技术工人工资差距。进口商品结构的变化对工资差距的影响则不确定。行业特征对工资差距的影响也非常显著,技术密集型行业偏向对技术工人的培养;劳动密集型行业则会偏向对具有比较优势的非技术工人的投入;资本密集型行业对技术工人的需求影响不显著。     

贸易自由化对工资差距的影响及作用机制--基于中国制造业企业的实证研究

本文利用世界银行的中国企业调查数据分析贸易自由化对工资差距的影响,结果表明贸易自由化显著提升企业内工资差距。企业进口投入品的行为使其内部普通员工的最高与最低工资之比提高约50％,总经理与中层经理的工资比提高约30％,中层经理与普通员工的工资比提高约12％－20％。进一步分析表明,自由贸易使企业对高技能劳动力的需求更大,更倾向于采用绩效工资、进行研发投资、提供员工培训和使用计算机,这些因素均导致工资差距的上升。     

Access to imported intermediates and intra‐firm wage inequality

We use Chinese firm‐level data from the World Bank Investment Climate Survey to examine the link between importing intermediates and intra‐firm wage inequality. Our results show that intermediate input importers not only have a significant wage premium but also have a greater intra‐firm wage dispersion than non‐importing firms. This pattern is robust when we control for productivity and use trade costs as the instruments. We further investigate the mechanism of how importing intermediates might contribute to both inter‐firm and intra‐firm wage inequality. Our evidence is consistent with three important channels. First, imported intermediate inputs complement skilled labour. Second, intermediates importers are more likely to use performance pay. Third, imported inputs complement innovation and employee training.     

Trade liberalization and rising wage inequality in Latin America: Reconciliation with HOS theory

The paper puts forward the hypothesis that the transitory effects of trade liberalization on wage inequality can differ from the long-run outcome. In cases where the HOS theory predicts a decline in wage inequality in the long run, a temporary rise can, nevertheless, occur due to (i) the asymmetries in the speed of contraction in the import sector and expansion in other sectors, and (ii) the capital-skill complementarity in production. The asymmetric contraction and expansion causes a transitory capital accumulation that boosts the relative and the real wage of skilled labor due to capital-skill complementarity. Although the long-run HOS fundamentals are, therefore, dominated in the short run by the transient effects arising due to capital-skill complementarity, the observed rise in wage inequality is nonetheless consistent with the HOS theory appropriately extended to a dynamic setting.     

Unemployment,environmental policy,and international migration

In this paper, we investigate the effects of an increase in emission tax, a decrease in fixed manufacturing wage rate, and an increased inflow of foreign workers on competitive wages, the environmental stock, the economic welfare of the representative consumer, and employment in the presence of a pollution abatement equipment sector and unemployment. Our main findings are that an increase in emission tax and a decrease in the urban minimum wage rate decrease unemployment, and international immigration may increase the competitive wage rate, employment rate, stock of environmental capital, and economic welfare of the representative worker.     

Education bias of trade liberalization and wage inequality in developing countries

The aim of this article is to examine the impact of increased trade on wage inequality in developing countries, and whether a higher human capital stock moderates this effect. We look at the skilled–unskilled wage differential. When better educated societies open up their economies, increased trade is likely to induce less inequality on impact because the supply of skills better matches demand. But greater international exposure also brings about technological diffusion, further raising skilled labour demand. This may raise wage inequality, in contrast to the initial egalitarian level effect of human capital. We attempt to measure these two opposing forces. We also employ a broad set of indicators to measure trade liberalization policies as well as general openness, which is an outcome, and not a policy variable. We further examine what type of education most reduces inequality. Our findings suggest that countries with a higher level of initial human capital do well on the inequality front, but human capital which accrues through the trade liberalization channel has inegalitarian effects. Our results also have implications for the speed at which trade policies are liberalized, the implication being that better educated nations should liberalize faster.     

Economic Reform,Skill Formation and Foreign Capital

Does trade liberalisation promote skill formation and positively influence the inflow of foreign capital in an economy? How do incentives offered to foreign capital affect skill formation and skilled‐unskilled wage inequality? Is liberalisation of agricultural exports counterproductive to skill formation and foreign capital inflow in the economy? We try to capture these relationships between foreign capital and skill formation in a small open economy facing various exogenous shocks. Among other results, we show that import liberalisation increases skill formation and the inflow of foreign capital in the country. We explore the evolving state of the skilled‐unskilled wage gap in a regime of greater skill formation.     

Minimum wages and information

The paper investigates the impact of minimum wage legislation on the level of employment, both for skilled and unskilled labor, when employers are imperfectly informed about a potential employee’s skill level prior to hiring. In this context, imposition of a minimum wage can facilitate the skilled employee’s provision of information about his skill. When laborers can take a certifying test, minimum wages facilitate the sorting effect of the test. If the supply of skilled labor is sufficiently elastic relative to the demand for unskilled labor, this enhancement of the sorting effect can increase total employment, and reduce prices.     

Urban development,excessive entry of firms and wage inequality in developing countries

This paper examines the short and long-term effects of urbanisation, via favourable urban development policies, on income distribution and social welfare for a developing country, in which the urban manufacturing sector is characterised by imperfect competition and free entry. Urbanisation shifts rural workers to the highly productive urban sector, while causing production in urban firms to expand because of scale economies. However, urbanisation may worsen wage inequality between skilled and unskilled labour in the short term. In the long term, urbanisation can attract new firms to the urban sector and favourable urban development policies may result in excessive entry of firms, which can amplify wage inequality in the economy. This entry-amplifying effect is confirmed empirically, especially for low and lower-middle-income countries. If the entry effect is not considered, the impact of urbanisation on wage inequality could be understated by 13% for low and lower-middle-income countries.     

Cross-border pollution,public pollution abatement and capital tax competition

We analyze the case where governments have to use income tax revenue to finance public pollution abatement and relate the results to the existing literature on capital tax competition. We show that the impact of public pollution abatement on Nash taxes on mobile factor income is non-trivial and the standard results from the tax competition literature can be reversed. When the two countries are identical, the Nash equilibrium capital income taxes converge to the tax on immobile factors income as the degree of cross-border pollution converges to one. When countries are asymmetric and pollution is local the presence of public pollution abatement lowers the capital tax for the capital exporting country, while the impact on the capital tax of the capital importing country is ambiguous.     

Jobs and Exposure to International Trade within the Service Sector in Sweden

To establish in which service industries there is international trade (or it may potentially exist), we calculate locational Ginis for different industries. The basic idea is that from this measure of regional concentration of different activities within a country we can identify industries where there appears to be regional trade, and hence also a potential for international trade. Based on our method, we find that: (i) the number of employed in tradable service appears to be at least as large as in the manufacturing sector, (ii) tradable service is much more skill intensive than manufacturing, and (iii) lately, the employment in tradable service has increased substantially. We argue that the last mentioned result is consistent with the substantial growth of skilled labour in Sweden since the mid‐1990s (Rybczynski effect) and factors leading to increased relative demand for skilled labour. Particularly, increased competition from and offshoring to low‐wage countries seem recently to have had a considerable impact on the creation of skilled jobs and the displacement of less skilled jobs in the tradable sector in Sweden. Furthermore, we apply a similar method as for industries to identify tradable occupations. Using our classification of tradable industries and tradable occupations in a Mincer type wage equation, we find that workers in such industries and occupations receive a wage premia of 12–13 per cent.     

Who Supports Free Trade in Latin America?

This paper examines individual trade policy preferences across 17 countries in Latin America. The focus is on whether skilled or unskilled workers are more likely to support liberalised trade and on whether country characteristics, such as factor endowments, alter the preferences of skilled and unskilled workers. Based on the standard Heckscher‐Ohlin model and the Stolper‐Samuelson theorem, wage inequality in developing countries will decrease under free trade and unskilled workers will benefit. We find that on average skilled workers are more likely than unskilled workers to support free trade in Latin American countries. Separate country regressions reveal that this pattern is only statistically significant in 8 out of 17 Latin American countries. However, there are no countries in our sample in which unskilled workers are statistically more likely to support free trade than skilled workers, not even in the lowest skill‐endowed country in the sample. We also find that people from Latin American countries with higher GDP, faster growth, more cropland and a longer period of time since reform were more likely on average to support free trade.     

The endogenous skill bias of technical change and wage inequality in developing countries

This paper draws on existing empirical literature and an original theoretical model to argue that technical change does not have to be skill-biased in developing countries. Instead, the extent to which technology adoption in developing countries favors skilled workers depends on a number of factors. 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. Developing countries experience technical change that is skill-biased when imported skill-biased technologies become relatively cheaper. Increased skill supply further biases technical change in favor of skilled labor. These features aid our understanding of the observed rises in inequality within developing countries, the absence of a significant downward effect of expanded educational attainment on skill premia, and the differential effects of trade liberalization on inequality.