The Impact of Foreign Competition and New Technologies on the Demand for Heterogeneous Labor

The Impact of Foreign Competition and New Technologies on the Demand for Heterogeneous Labor This paper investigates the impact which foreign competition, investment in information and communication technologies (ICT) and investment in capital goods other than ICT-related have on the demand for heterogeneous labor. A dynamic interrelated factor demands model serves as the theoretical framework and is estimated by an ordered probit model. Cross-sectional data from a business survey in the service sector are used in the empirical analysis.It turns out that skill-biased technological change is adeterminant of the recent decline in relative demand for lowskilled labor in the business-related services sector.Expected foreign competition positively affects the demandfor unskilled workers and for workers with completed vocationaltraining, while it leaves the demand for the other skill groupsunchanged. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

The Impact of Foreign Competition and New Technologies on the Demand for Heterogeneous Labor

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2001 by Kluwer Academic Publishers
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1023/A:1011117710166
Publisher site
See Article on Publisher Site

Abstract

This paper investigates the impact which foreign competition, investment in information and communication technologies (ICT) and investment in capital goods other than ICT-related have on the demand for heterogeneous labor. A dynamic interrelated factor demands model serves as the theoretical framework and is estimated by an ordered probit model. Cross-sectional data from a business survey in the service sector are used in the empirical analysis.It turns out that skill-biased technological change is adeterminant of the recent decline in relative demand for lowskilled labor in the business-related services sector.Expected foreign competition positively affects the demandfor unskilled workers and for workers with completed vocationaltraining, while it leaves the demand for the other skill groupsunchanged.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Oct 3, 2004

References

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