Trade, Technology Adoption and Wage Inequalities
نویسنده
چکیده
This paper studies the impact of trade liberalization on technology adoption and its e ect on wage inequalities. We develop a trade model with heterogeneous rms introducing a xed technology cost and di erent types of skilled labor. The contribution of this paper is to develop a possible explanation to the increase in the skill premium in developping countries. The traditional framework, H-O-S, predicts a reduction of inequalities after trade reforms in developing countries, while there is widespread empirical evidence of an increase in the skill premium in these countries. In our model the key mechanism is based on the impact of trade on the decision of technology adoption and its e ect on the relative wage of skilled labor. There are several channels through which trade liberalization a ects rms' decisions. There is a very well-known "selection e ect" in the domestic and export markets presented in Melitz (2003). The new channel introduced in this paper is related to the e ects of trade policy on the extensive margin of technology adoption and on the skill intensity in a general equilibrium framework. After trade reforms the increase in export revenues raises the probability that the most productive exporters will adopt high technology, which in turn will require higher skilled workers. The nal e ect of trade policy in this model is the skill premium e ect. Exporters producing with high technology will increase their relative demand of skilled labor, thereby enhancing the inequalities.
منابع مشابه
No 902 December 2008 Trade , Technology Adoption and Wage Inequalities : Theory and Evidence
This paper develops a model of trade that features heterogeneous firms, technology choice and different types of skilled labor in a general equilibrium framework. Its main contribution is to explain the impact of trade integration on technology adoption and wage inequalities. It also provides empirical evidence to support the model’s predictions using plant-level panel data from Chile’s manufac...
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