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  4. April 2013
  5. Importing Skill-Biased Technology

Importing Skill-Biased Technology

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Abstract

The production of capital equipment is concentrated among a small group of countries, and many countries import a large share of their equipment. If capital-skill complementarity is an important feature of technology, international trade may have important effects on the skill premium through its impact on equipment accumulation. In this paper we propose a tractable framework for evaluating this effect, provide simple analytic expressions linking observable changes in import shares by sector to changes in real wages of skilled and unskilled workers (and, therefore, the skill premium), and quantify the importance of this effect for a large set of countries. (JEL E22, F11, F16, J24, L64)

Citation

Burstein, Ariel, Javier Cravino, and Jonathan Vogel. 2013. "Importing Skill-Biased Technology." American Economic Journal: Macroeconomics, 5 (2): 32-71. DOI: 10.1257/mac.5.2.32

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JEL Classification

  • E22 Capital; Investment; Capacity
  • F11 Neoclassical Models of Trade
  • F16 Trade and Labor Market Interactions
  • J24 Human Capital; Skills; Occupational Choice; Labor Productivity
  • L64 Other Machinery; Business Equipment; Armaments
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