Showing papers by "Robert Stehrer published in 2004"

International Outsourcing and the Skill-Specific Wage Bill in Eastern Europe

Abstract: This paper analyses the effects of international fragmentation in terms of intermediate goods trade on the dynamics of the skilled-to-unskilled labour wage bill ratio in 14 manufacturing industries of the Czech Republic, Hungary and Poland. Both intermediate goods exports and imports of the CEEC exhibit a positive impact on the wage bill ratio. Since 1993, intermediate goods trade with the EU alone has accounted for a considerable reduction of the predicted annual change in the skilled-to-unskilled wage bill ratio in the three CEEC.

Employment, education and occupation structures: a framework for forecasting

Abstract: This paper introduces a model for forecasting changes in employment levels and structures by sectors, occupational categories and educational attainment levels which is then applied to the new EU member states (NMS) and Bulgaria and Romania. The model is based on the following ideas As these countries face lower productivity levels as compared to the EU-15, the scope for technical change and catching up is quite large. Thus, if these countries converge to the EU-15 productivity levels at given trajectories, real income levels are also changing, which implies changes in demand and thus output structures by Engel curve effects. The latter are modelled as convergence to the EU-15 output structures. These factors, i.e. changes in productivity levels and output structures, in turn imply changes in the level and structure of employment. For making the forecasts we estimated the speed of convergence in productivity levels by sectors and the sectoral output shares econometrically from a larger country sample (including mainly EU countries). From these estimates and the initial levels, forecasts of convergence patterns for productivity levels and output shares are calculated, which are presented for the period up to 2012. A further decomposition with respect to occupational categories and educational attainment levels allows to forecast labour demand with respect to these groups.

Can Trade Explain the Sector Bias of Skill-biased Technical Change?

Abstract: There is evidence that the skilled to unskilled wage rates were rising in the 1980s and at the beginning of the 1990s This can potentially be explained by a Heckscher-Ohlin framework where economic integration implies that the advanced countries specialize in skilled-labour-intensive industries and developing countries in unskilled-labour-intensive industries However, actual trade figures show that import penetration was particularly high in the skill-intensive industry segments also for trade integration with developing economies, which would imply a falling relative wage rate of skilled workers in the advanced countries in the Heckscher-Ohlin framework If, however, these trade patterns induce relatively stronger skill-biased technical progress in the skill-intensive sectors, then the effect of trade would again be a potential reason for the widening of the wage differential between skilled and unskilled workers in the advanced countries This paper presents some evidence that (negative) employment effects or positive productivity effects due to trade integration are particularly strong in the skill-intensive industries which supports the hypothesis above

Modelling International Economic Integration: Patterns of Catching-up, Foreign Direct Investment and Migration Flows

Abstract: This paper develops a Schumpeterian model of international specialization and catching-up. In a previous version of the model we looked at the impact on international trade specialization when different patterns of technological catching-up are followed. One of these is a Gerschenkron pattern at the industrial level, where the largest initial gaps in productivity give rise to the fastest relative productivity growth rates. Depending on the productivity, wage and profits dynamic there can be 'comparative advantage switchovers' in which a catching-up economy turns its competitive advantage towards medium- to high-tech areas. In this paper we follow up the impact of the unit profit or 'rent' patterns on foreign direct investment and through that on the speed of technology transfer and hence on differential productivity growth. We show that labour market dynamics, productivity catching-up and investment patterns all combine to determine the evolution of the international division of labour. We point also to the impact on labour demand and wage structures (between skilled and unskilled workers) both in the lead and the catching-up economies. The model thus contributes to the literature on globalization and labour markets.

Technology diffusion, international competition and effective demand

Abstract: Ce papier etudie des questions relatives a trois caracteristiques de la croissance economique des annees 80 et 90. Le papier developpe un modele d'economies integrees (par le commerce et l'investissement direct international) qui vise a examiner ces caracteristiques precedemment notees. Il possede des traits schumpeteriens et keynesiens en ce qu'il decrit les modifications de la repartition du produit qui accompagne les processus de diffusion des nouvelles technologies (l'emergence des rentes schumpeteriennes) et discute les questions de demande effective soulevees par les modifications de la repartition et le processus de rattrapage.

Global Growth Processes: Technology Diffusion, Catching-up and Effective Demand

Abstract: This paper analyses two issues that were characteristic of the global growth processes of the 1980s and 1990s (i) an important diffusion process of a new general purpose technology (GPT) and (ii) a speed-up of catching-up of a sub-group of developing economies (South East Asia, later China and India) in an era of increasing globalization. Both these factors should in principle have given a boost to global economic growth; however, for quite some time, actual growth has been perceived as being in a more precarious state in advanced economies than in the earlier post-war period. The paper develops a dynamic model of integrated economies (through trade and FDI) which attempts to address the above developments. The model has Schumpeterian and Keynesian features in that it depicts the income distributional shifts which might accompany the diffusion processes of new technologies (Schumpeterian innovational rents) and discusses effective demand problems which can arise both as a result of income distributional changes on the one hand and catching-up processes on the other. We start with a stylized description of a competitive situation between two sets of advanced economies (say, the US and the EU) which are characterized by different behavioural responses in labour and product markets and where one region (the US) experiences the diffusion process of the new GPT earlier than the other region (the EU). The introduction of a new technology shifts the macro-distribution of income towards profits and the reliance of the growth process towards the investment (rather than consumption) component of effective demand. Differences in the workings of the labour and product markets affect the extent of these macro-distributional shifts. In addition the model is one in which the two sets of economies are integrated through trade and foreign direct investment flows. Transitory paths describe the impact of changing cost competitiveness and profitability positions upon net trade balances and net foreign direct investment flows. This amounts to leakages and injections in the two sets on economies which we track in terms of evaluating differences between 'potential' and 'actual' growth paths. The second issue we try to analyse with the model is the impact of catching-up processes of a significant group of developing economies. Successful catching-up processes are characterized by fast productivity growth, by even stronger transitory wage-productivity growth gaps and hence macro-distributional shifts. This has implications for international direct investment flows and for global effective demand structures with the added dimension that the weight of the group of catching-up economies in the global economy is growing rapidly, which in turn affects the response mechanisms in the advanced economies. The focus remains on the exploration of the impact that different behavioural characteristics of labour and product markets have on the growth paths of the two sets of economies. The model allows for endogenous exchange rate dynamics, some endogeneity of productivity growth and changing international 'sourcing' patterns of intermediate inputs.