Trade liberalization, technology import and skill upgrading in Tunisian manufacturing industries

Abstract

Purpose– The purpose of this paper is to focus on the impact of trade openness and technology import on the change in demand structure of employment toward skilled workers. Because of the limited number of empirical papers done in the case of Tunisia, this research investigates whether these factors had similar effects on relative labor demand in Tunisia to those observed in the international literature.Design/methodology/approach– For this purpose, the paper uses a manufacturing industries database provided by the Tunisian National Institute, the Quantitative Economic Institute and Comtrade of United Nations for six manufacturing industries. The methodology used here is a panel data technique, and consists of estimating a dynamic relative employment equation.Findings– Empirical results show that trade liberalization and technology change positively affect relative employment of Tunisian manufacturing industries which confirms the existence of skill biased technological change that contributes to increase the relative demand for skilled workers.Originality/value– The paper adds to existing literature by studying for the first time the case of Tunisian manufacturing industries by using dynamic model. The paper deals also with an econometrics issues related to the use of suitable estimation methodology in the case of dynamic panel data at macroeconomics level.