Effects of Economic Development in China on Skill-Biased Technical Change in the US Report as inadecuate




Effects of Economic Development in China on Skill-Biased Technical Change in the US - Download this document for free, or read online. Document in PDF available to download.

Abstract

In this study, we explore the effects of a change in unskilled labor in China on the direction of innovation in the US by incorporating production offshoring into a North-South model of directed technical change. We find that: absent offshoring and lacking intellectual property rights IPRs in China - as in the early 1980s - an increase in unskilled labor in China should lead to skill-biased technical change. If instead offshoring is present and-or IPRs are better enforced as in more recent times, then a decrease in unskilled labor in China should lead to skill-biased technical change. Furthermore, an increase in the per capita stock of capital in China reduces offshoring and also leads to skill-biased technical change. Calibrating the model to China-US data, we find that under a moderate elasticity of substitution between skill-intensive and labor-intensive goods, the decrease in unskilled labor and the increase in capital in China can explain about one-third of the recent increase in the skill premium in China through skill-biased technical change in the US.



Item Type: MPRA Paper -

Original Title: Effects of Economic Development in China on Skill-Biased Technical Change in the US-

Language: English-

Keywords: economic growth; skill-biased technical change; offshoring-

Subjects: F - International Economics > F1 - Trade > F16 - Trade and Labor Market InteractionsJ - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure ; Wage DifferentialsO - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences ; Diffusion ProcessesO - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization ; Manufacturing and Service Industries ; Choice of Technology-





Author: Chu, Angus C.

Source: https://mpra.ub.uni-muenchen.de/52926/



DOWNLOAD PDF




Related documents