Skill-Biased Technology Transfer EVIDENCE FACTOR BIASED TECHNOLOGICAL CHANGE IN DEVELOPING COUNTRIES

This paper investigates the skill-bias of technological change in developing countries using a global sample of manufacturing industries. We report a striking increase in demand for skilled workers in the 1980s in middle income countries (GDP/capita between $2000 and $10,000). This increase is mostly due to skill-upgrading within industries rather than a reallocation of employment from low to high-skill industries and cannot be explained by capital-skill complementarity, thus indicating skill-biased technological change. Furthermore, the same industries that substituted toward skilled labor in middleincome countries in the 1980s had been doing so in the U.S. through the 1960s, 1970s and 1980s. We conclude that recent skill-biased innovations migrated rapidly from developed to middle income countries, but find no evidence of transfer to low income countries. Eli Berman Stephen Machin Boston University University College, London [email protected] [email protected] http://econ.bu.edu/eli