Openness and technological innovation in East Asia: have they increased the demand for skills?

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. This paper asks whether the increased openness and technological innovation in East Asia have contributed to an increased demand for skills in the region. We explore a unique firm level data set across eight countries. Our results strongly support the idea that greater openness and technology adoption have increased the demand for skills, especially in middle income countries. Moreover, while the presence in international markets has been skill enhancing for most middle income countries, this has not been the case for manufacturing firms operating in China and in low-income countries. If international integration in the region intensifies further and technology continues to be skilled biased, policies aimed at mitigating skills shortages in the region should produce continual and persistent increases in skills.JEL Classification: J23, J24, J31, O33

Structural Change and Wage Inequality in the Manufacturing Sector: Long Run Evidence from East Asia

“…We find that the coefficient measuring the relative value added of industry i compared to the rest of manufacturing is positive and statistically significant in all the different specifications. These results are in line with the SBTC hypothesis and confirm that in East Asia the process of structural change within the manufacturing sector-promoting the adoption of advanced technologies and capital-raises the wage premium due to the creation of new skilled jobs and the consequent greater demand for educated workers (Almeida, 2010;Lee & Wie, 2013). In addition, the positive and significant coefficient of the capital per employee ratio seems to confirm the complementarity between capital investment, technological upgrading and an increase in demand for more skilled labour.…”

“…Notes 1 Using firm-level data, Almeida (2010) shows that technological upgrading was one of the major determinants of wage inequality among East Asian economies. 2 See Haraguchi & Rezonja (2009).…”

Economic and Social Development of the Southern and Eastern Mediterranean Countries

“…Rent-seeking behavior absorbs productive capacities developed through education, especially if there is a predominance of public sector employment opportunities (Assaad 1997;Huitfeldt and Kabbani 2007;Pissarides and Veganzones-Varoudakis 2007). A mismatch between the demand for and the supply of skills could be driving down the private returns to schooling, which would run counter to the present trends in many developing countries, especially in the aftermath of trade liberalization (Revenga 1997;Pavcnik 2003;Fajnzylber and Fernandes 2004;Almeida 2012).…”

Skill Use, Skill Deficits, and Firm Performance in Formal Sector Enterprises: Evidence from the Tanzania Enterprise Skills Survey, 2015

“…Tanzania Development Vision 2025 envisions Tanzania becoming a middle income country by 2025(Planning Commission, 1999) 3 The Enterprise Surveys on the links between skills and firm performance in many countries and regions have been widely used in research. For example, seeAlmeida (2010) on East Asia,Tan et al (2007) on Russia, and Perotti (2014) on 29 countries in Sub-Saharan Africa. While this research has yielded important insights, it has been limited by the paucity of information on different dimensions of workforce skills and skill gaps.4 The formal sector is defined here as the universe of non-agricultural private enterprises producing goods and services for sale, that are registered with the authorities, and that employ five or more employees.5 This study on skills demand in the formal sector is one of several background papers prepared for the project.…”

“…The TESS did not elicit data on mean wages of the workforce by level of education; while it asked for mean wages by occupation, these data were incomplete and were not deemed reliable. The challenging data needs have prompted other researchers to rely instead on specifications using the skill shares of total labor (for example, seeAlmeida, 2010).25 Abowd et al (2007) exploit the availability of matched employer-employee panel data to study the responses of employers to gaps between desired and actual skills mix, using a partial adjustment model.…”