Skill-biased technological change, international trade and the wage structure

Arnd Kölling () and Thorsten Schank
Additional contact information
Arnd Kölling: Institute for Employment Research (IAB), Postal: Institute for Employment Research (IAB), Regensburger Str. 104, D-90478 Nuremberg, Germany,

No B1-3, 10th International Conference on Panel Data, Berlin, July 5-6, 2002 from International Conferences on Panel Data

Abstract: During the last two decades, the labour demand structure in Germany and other OECD countries has experienced a decrease in the demand for low skilled and a rise in the demand for highly skilled employees. The adoption of modern technologies in the production process as well as the growth of international trade are often regarded as the main driving factors behind this change. On the other hand, it is often argued that a more flexible wage structure could counteract the falling demand for the unskilled. This study investigates these hypothesis for West Germany, 1994-1997, using the LIAB, a unique German linked employer-employee panel data set, which combines information from the German employment statistics and the IAB establishment panel. Employing a Generalised Leontief cost function and controlling for unobserved plant heterogeneity, the demand for three different skill types of labour is estimated by the SUR-Method. The results show that the major part of the skill structure is determined by wages, while we have found only minor impacts of a skill-biased technological change, of international trade and of short-run effects due to the business cycle.

Keywords: labour demand; substitution; skill-biased technological change; labour hoarding; international trade; linked employer-employee data (search for similar items in EconPapers)
JEL-codes: J23 J31 O33 (search for similar items in EconPapers)
Date: 2002-02
New Economics Papers: this item is included in nep-dev and nep-lab
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Working Paper: Skill-biased technological change, international trade and the wage structure (2002)
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