Demand For Skilled Workers Research Articles

Public Education and Wage Inequality

In this paper, we analyze the relationship between public education and wage inequality. In public education systems, all students receive the same amount of education, so it is generally thought that the system equalizes wages among workers. Then, does the expansion of public education reduce wage inequality? In a two sector model where agents choose their occupation based on comparative skill advantages, we show that the expansion of public education increases wage inequality. The economy has two types of commodities, goods for consumption and educational services that have different values of skill elasticity in production. In addition, there are high and low skilled workers. As the skill elasticity of educational services is higher than goods for consumption, skilled workers choose to work at producing educational services and unskilled workers choose to work at producing goods for consumption. When the government increases the supply of education, the relative price of education varies and the demand for skilled workers increases so wage inequality increases.We also analyze the effect of public education and tax rate on the growth rate and derive the optimal tax rate to maximize this growth rate.JEL Classification: I28, O15, O41

OUTSOURCING TYPES, RELATIVE WAGES, AND THE DEMAND FOR SKILLED WORKERS: NEW EVIDENCE FROM U.S. MANUFACTURING

Existing studies on the impact of outsourcing on relative wages and the demand for skilled workers mainly focus on aggregate outsourcing, in which imported intermediate inputs are used as a proxy. We depart from the existing studies by focusing on various types of outsourcing based on the six‐digit NAICS U.S. manufacturing data. We show that downstream materials and service outsourcing are skill biased, whereas upstream materials outsourcing is not. We also produce other supplementary results pertaining to the impact of technology, different capital inputs on relative wages, and the demand for skilled workers. (JEL C33, F14, F15)

The recruitment crunch

Despite an increase in the demand for skilled workers, there is a lack of qualified science, engineering and technology graduates.

Analysis Of Human Capital Development In Technical Colleges In Imo State, Nigeria

The study assessed the human capital development in Technical Colleges in Imo State of Nigeria. All the Technical Colleges in the State participated in the study. Results showed low enrollment in the Colleges. There was gender inequity in the enrollment as only 59 females (1.97%) enrolled in the Technical Colleges. Findings also showed inadequate staff and facilities for technical courses in the Colleges. The study recommended urgent need for policy re-orientation where the state, private sector and the civil society would partner to facilitate labour-market orientation of technical and vocational education. There is also the need to match supply and demand for skilled workers through well established and defined manpower needs assessment and increased access to productive employment. Appropriate measures should be taken to collect, collate and analyze data in respect of supply of technical manpower for economic planning and labour market, impact assessment and monitoring. Keywords: Human capital, technical education, NigeriaJournal of Technology and Education in Nigeria Vol. 12 (2) 2007: pp. 54-61

A Regional Analysis of the Impact of Trade and Foreign Direct Investment on Wages in Mexico, 1984–2000

AbstractThe conventional Heckscher–Ohlin model of trade predicts an equalizing effect of trade on wages in developing countries abundant in less‐skilled labor. Contrary to these predictions, skill premiums and skill demand increased in Mexico following trade liberalization. “New” trade theories have offered several channels through which trade can increase relative wages and demand for skilled workers. One such channel is foreign direct investment and outsourcing. Using the Mexican Household Income and Expenditure Survey (ENIGH) covering 1984–2000, the author examines the relationship between the demand for skill and maquiladora employment across regions and states. In contrast to previous studies based on manufacturing data for the 1980s, little evidence is found that growth in maquiladora employment is positively related to the increase in relative wages or wage‐bill share of more educated workers.

The Effect of Mexican Workforce Migration on the Mexican Maquiladora Labor Market

A great deal has been written about the effects of foreign migration on the wages of U.S. workers. However, little is known about the effects of Mexican interstate immigration (i.e., internal Mexican migration) and international return migration of labor and foreign capital on wages and employment in the maquiladora industry in Mexico. We examine these issues by first computing cost and demand functions for Mexican skilled and unskilled labor in the Textile maquiladora industry in 20 Mexican states and the Food, Beverage, and Tobacco industry in 10 Mexican states for 1998-2001. In both industries we find that the demand for skilled workers is more elastic than that for unskilled workers and that foreign direct investment is beneficial for skilled workers, increasing their demand and relative wage. Separately, using the 2000 Mexican Census, we estimate the effect of migration on the equilibrium wage and employment of each labor type in the manufacturing industry labor market. We find that interstate immigration and international return migration have a positive effect on wages. A combination of these two models allows calculation of the effects of labor and capital migration on the demand for each factor and changes in factor wage and employment shares. We find that wages and employment in the maquiladora industry have remained relatively constant due to substantial migrant inflows in all but one Mexican state, where substantial reductions in the wage of unskilled labor and the quantity of skilled labor have occurred.

Viet Nam: Recent Economic Developments and Key Challenges

This paper includes a review of recent economic developments in Viet Nam, highlighting recent positive trends in reducing poverty and other key economic indicators. The role of innovation and the relatively rapid uptake of technology is emphasized as a possible factor underpinning recent rapid growth in labour productivity and incomes. Equitable human development and allocation of factors of production may be facilitating the transfer of new skills and technology. While medium-term economic prospects look mostly sound, the paper identifies the following potential development bottlenecks: (i) the rapidly increasing demand for skilled workers and managers and for physical infrastructure; (ii) the social tensions inherent in the rapid rural-urban transition; (iii) institutional development and public sector efficiency; and (iv) environmental challenges. Other key risks relate to the possibility of a downturn resulting from (i) the current investment boom (and bubbles in the capital and real estate markets) and (ii) a possible downturn in regional and/or global economies.

Technology and the Demand for Skill: An Analysis of Within and Between Firm Differences

We estimate the effects of technology investments on the demand for skilled workers using longitudinally integrated employer-employee data from the U.S. Census Bureau's Longitudinal Employer-Household Dynamics Program infrastructure files spanning two Economic Censuses (1992 and 1997). We estimate the distribution of human capital and its observable and unobservable components within each business for each year from 1992 to 1997. We measure technology using variables from the Annual Survey of Manufactures and the Business Expenditures Survey (services, wholesale and retail trade), both administered during the 1992 Economic Census. Static and partial adjustment models are fit. There is a strong positive empirical relationship between advanced technology and skill in a cross-sectional analysis of businesses in both sectors. The more comprehensive measures of skill reveal that advanced technology interacts with each component of skill quite differently: firms that use advanced technology are more likely to use high-ability workers, but less likely to use high-experience workers. These results hold even when we control for unobservable heterogeneity by means of a selection correction and by using a partial adjustment specification.

Foreign direct investment and wage differentials in Taiwan

The ease of restrictions on foreign direct investment in China since 1990 has attracted a continuous and dramatic flow of outward investment from Taiwan to the mainland. At the same time, the relative wages for skilled workers in Taiwan have risen mildly despite a rapid increase in the share of educated workers in its labor market. The aim of this paper is to explore the linkage between capital outflows to China and the wage share of skilled workers in Taiwan over the period 1991 – 2001. We find that the pattern of changes in relative wages is consistent with shifts in the relative demand for skilled labor. For the most part, the increases in the relative demand for skilled workers could be attributable to within-industry factors. Findings also indicate that outward direct investment to China has a significantly positive impact on the skilled labor wage share.

Meeting the skills needs of a buoyant economy: apprenticeship—the Irish experience

The Irish economy has grown at an unprecedented rate over the last decade and the demand for skilled workers has increased dramatically. The Irish Standards‐Based Apprenticeship (SBA) system has been one of the cornerstones of intermediate skills development with the capacity to produce high‐quality craft workers and in sufficient numbers to meet demand. Introduced in 1993 on a phased basis, it now extends to all designated trades. Several aspects of the Irish system are striking. This paper provides empirical evidence of the success of the system for training workers for the construction industry and it also identifies a number of structural weaknesses. Its initial success is attributable to social partnership and its continued success has been facilitated by the capacity of the training agencies to respond to the national need by providing additional places for the educational release element of the system. The success of the Irish model is demonstrated in this paper in a number of ways, including a very high completion rate, high‐quality training and satisfaction among all the stakeholders that it is a successful system of apprenticeship.

Demand for Skills in Canada: The Role of Foreign Outsourcing and Information-Communication Technology

This study examines the impact of information and communication technologies (ICT) and of foreign outsourcing on the demand for skilled workers. One of the defining features of the Canadian economy in the last two decades has been an increasing wage gap between more- and less-skilled workers. Over the same period, there have been dramatic increases in expenditures on information and communication technologies and in purchases of foreign intermediate inputs. Using data for 84 Canadian manufacturing industries over the 1981-1996 period, we find that both ICT and foreign outsourcing are important contributors to the demand for skills.

Academic Standards for Developing, Implementing, Evaluating, and Improving Information Science and Technology Baccalaureate Degrees

Introduction In 2004, approximately two million individuals with a bachelor's degree worked in the fastest growing information sciences and technology (IST)-related professions. Projection statistics indicate that occupations in the IT field are currently, and will continue to be, amongst the fastest growing through 2014, with an average projected rate of growth of 43% within an eight year period, resulting in approximately 844 thousand new jobs by 2014 (United States Department of Labor Bureau of Labor Statistics, 2005, pp. 75 & 77) as indicated in Table 1. Despite the dot-com crash and overseas outsourcing, IST employees continue to be in demand. With the leveling-off of the economic boom in the internet and telecommunications industries (Commission of Professionals in Science and Technology, 2003, p. 1), positions in fields such as IT security, telecommunications, electronic commerce, electronic government, and other Internet functions continue to grow. Except for a slight slowdown during 2001-2002, the Internet's growth has been consistently dramatic, which is one factor that supports the employment projections (Schneider, 2006, p. 58). Figure 1 illustrates IT-related professional employment data from 1996 through 2005 and the factors impacting employment. Based on these projections, the demand for skilled workers will increase by an average of 105 thousand per year. Furthermore, as the software and information technology industry continues to mature, the prospects of IST careers will continue to evolve, mutate, and expand (Nathan & Turvey, 2001). In response to the increased demand for educated IST professionals, universities have strived to meet this demand by offering an IST degree program. The IST undergraduate degree has been described as an interdisciplinary program that evolved and integrates curricula from information science, technology, and organizational behavior degree programs that have established accredited criteria. These programs are computer science and information systems, which are accredited by Computing Accreditation Commission (CAC) (2005), library and information sciences, which are accredited by the American Library Association, (2002), computer engineering technology and information engineering technology, which are accredited by the Technology Accreditation Commission (TAC) (2005), and business administration, which is accredited by the Association to Advance Collegiate Schools of Business (AACSB) (2006) as illustrated in Figure 2: IST Framework and Related Accreditation Organization. [FIGURE 1 OMITTED] [FIGURE 2 OMITTED] Successful organizations utilize similar business structures and methods of operation; however, each may vary in the product and/or service provided to meet a specific market niche and gain a competitive advantage. The same holds true with academic institutions and their degree programs. In D. M. Norris and Morrison's text, Mobilizing For Transformation: How Campuses Are Preparing For The Knowledge Age, they refer to such practices as leveraging the forces for transformation on campus (1997, p. 1). Thus, program structures and methods of operation from similar technical degree programs were used to develop standards for the IST degree program. This study identifies national standards for IST baccalaureate programs in the United States based on the practice of using accreditation criteria from similar disciplines as a model for program development (Burkett, 2002). Thus, the premise of this study is that accreditation criteria used for similar technical disciplines could be applied to the IST discipline with some variations. Therefore, a survey was developed by the researcher based on common program criteria outlined in Appendix A that were gleaned from the accreditation criteria of IST-related degree programs (i.e., AACSB(2006); ALA, (2003); CAC, (2005); TAC, (2005)). The criteria for each of these programs along with the IST specific criteria were compiled into a comprehensive list. …

The effect of trade on productivity growth and the demand for skilled workers in Canada

We use an input–output model to examine the effect of trade integration on productivity growth and the demand for skilled workers in Canada for the period 1981–1997. We find that trade integration has a positive effect on both labour productivity and total factor productivity. Labour productivity and total factor productivity grew faster in export and import industries than in the total business sector over this period, and this productivity growth gap has widened over time. Canada is found to have a comparative advantage in capital- and natural-resource-intensive industries, although it has declined over time. We find that trade integration has little effect on the demand for skilled and unskilled workers in Canada.

L'augmentation des inégalités est-elle le prix à payer pour l'innovation et la croissance ?

h Rising Wage Inegality the Price Cost of Innovation and Growth ? This article presents an analysis of the models that have been developed in the literature to account for the rise in wage inequality during the 1980s and the 1990s. These models build upon the assumption of an acceleration in the rate of technological progress associated with the diffusion of the new information and communication technologies. What is at stake in this literature is not to justify the existence of skill-biased technical per se, but rather to explain the main and recent dimensions of such a bias on relative wages. A first dimension lies in the extent of wage inequality, namely the aggravation of inequality since the 1980s in developed economies. The aim is to explain why such a bias has occurred in the 1980s, while technical change has diffused all along the twentieth century, precisely during a period where skilled labour supply increased. A second dimension of wage inequality concerns its fractal nature, that is the fact that it persists within education groups. Furthermore, within groups inequality features a strong transitory dimension, and differs in nature according to the level of education considered. Depending on the determinants — exogenous or endogenous - and the consequences on wage inequality - permanent or transitory - that such models explain through the recent acceleration in the rate of technological change, two categories of models can be distinguished. In the first one, the technological bias is analysed by focusing on the impact of technical change on the returns to human capital. Human capital embeds for example individual ability, the ability to absorb and use new technologies, assets, luck, specific technological competencies or general education. The second category of models highlight the mechanisms likely to explain the interaction between technological progress, supply and demand for skilled workers. These approaches however explain only a restrictive part of the evolution of wage inequality. In the long run on the one hand, and when considering dimensions such as work organization on the other hand, other categories of models are necessary.

Technical Change and the Wage Structure During the Second Industrial Revolution: Evidence from the Merchant Marine, 1865-1912

Using a large, individual-level wage data set, we examine the impact of a major technological innovation – the steam engine – on skill demand and the wage structure in the merchant shipping industry. We find that the technical change created a new demand for skilled workers, the engineers, while destroying demand for workers with skills relevant only to sail. It had a deskilling effect on production work – able-bodied seamen (essentially, artisans) were replaced by unskilled engine room operatives. On the other hand, mates and able-bodied seamen employed on steam earned a premium relative to their counterparts on sail. A wholesale switch from sail to steam would increase the 90/10 wage ratio by 40%, with most of the rise in inequality coming from the creation of the engineer occupation.

The Role of Technology in Determining Skilled Employment: An Economywide Approach

This paper compares the role of technological change with that of trade in explaining the increased demand for skilled workers. The paper shows technology has played the dominant role in changing employment patterns in Australia. The finding is consistent across industries, including those having experienced increased import competition. Rising capital intensity of production has also promoted the employment of more highly skilled workers.

The Increasing Demand for Skilled Workers in Australia: The Role of Technical Change

This paper examines the changing demand for high skilled workers in Australia. The author uses the skill biased technical change (SBTC) hypothesis to show the potential effect of technological change on the demand for high skilled workers. The analysis covers the years 1978 to 1998, which includes a period of extensive microeconomic reform in Australia. This paper concentrates on filling the gap in empirical knowledge that now exists regarding the relevance of the SBTC hypothesis for the increase in earnings dispersion by skill level in Australia. This goal implies a focus on the link between technological change and the demand for skilled workers in furthering understanding of the factors leading to greater earnings dispersion.

Relative wages and education premium in Tijuana: 1987-1996

Over the last 20 years Mexico has experienced rapid economic reforms which have impacted labor markets and, in particular, relative wages. Based on the fact that these changes have had a differential impact on different industries and different regions of the country, we explore changes in relative wages from 1987 to 1996 in the border city of Tijuana. Using wage regressions for different sections of Tijuana's labor market we find that skill premiums increased during this period. However, comparing results with those for Mexico City, we found that the increase in skill (education) premiums for high‐skilled workers in Tijuana is systematically smaller across industries. It seems, thus, that modernization has not radically changed the labor‐intensive nature of industrialization in Tijuana. It has increased the demand for skilled workers, but it has not done so either at the pace or at the level of Mexico City.

The Role of Flexible Production in Earnings Inequality

Increasing tention from economists. The broad consensus is that the main reason earnings inequality has increased in the United States over the past two decades is technical change, leading to an increased relative demand for skilled workers. The specific change in technology most often cited is improvements in computer technology (Krueger 1993; Berman, Bound, and Griliches 1994; Auter, Katz, and Krueger 1997). This paper argues that a different type of technological change, the shift from mass to flexible production, has been a more important cause of increasing inequality. Flexible production increases the relative demand for skilled, highly paid workers and decreases the demand for unskilled, lowwage workers, thereby creating greater earnings inequality.

Flexibilität der Qualifikationsstruktur aus betrieblicher Sicht: Substitutionalität oder Komplementarität / Flexibility of Firms’ Labor Demand: Substitutability or Complementarity

Zusammenfassung Auf der Basis eines zusammengefügten Datensatzes aus dem IAB-Betriebspanel und der Historikdatei der Beschäftigtenstatistik wurde für 1995 für das westdeutsche Produzierende Gewerbe ein Translog-Kostensystem für sechs Qualifikationsgruppen (Arbeiter und Angestellte jeweils in un-/angelernte, qualifizierte und hochqualifizierte Beschäftigte unterteilt) geschätzt. Untersucht wurden die aus der betrieblichen Kostenfunktion für unterschiedlich qualifizierte Qualifikationsgruppen sich ergebenden Substitutionsmöglichkeiten. Die ermittelten Substitutionsbeziehungen innerhalb der einzelnen Arbeitergruppen sind denen innerhalb der einzelnen Angestelltengruppen sehr ähnlich: Qualifizierte - und zu einem geringeren Maße auch Hochqualifizierte - erweisen sich als Substitute für Un-/Angelernte. Dies könnte zumindest teilweise den Anstieg der Arbeitslosigskeit der Un- und Angelernten erklären. Demgegenüber werden Qualifizierte und Hochqualifizierte vom Lohn der jeweils anderen Gruppe nicht beeinflußt. Eine mit der Qualifikation abnehmende Eigenlohnelastizität zeigt sich zwischen Qualifizierten und Hochqualifizierten, nicht jedoch zwischen Un-/Angelernten und Qualifizierten. Zwischen Arbeitern und Angestellten sind die Substitutionsbeziehungen relativ gering, wobei un-/angelernte, qualifizierte und hochqualifizierte Arbeiter jeweils zur analogen Angestelltengruppe in komplementärer Beziehung stehen. Schließlich kann die These einer stärkeren Komplementarität zwischen qualifizierten Arbeitskräften und Sachkapital als zwischen nicht formal qualifizierten Arbeitskräften und Sachkapital nicht bestätigt werden.