scholarly journals Offshoring and Directed Technical Change

2015 ◽  
Vol 7 (3) ◽  
pp. 84-122 ◽  
Author(s):  
Daron Acemoglu ◽  
Gino Gancia ◽  
Fabrizio Zilibotti
Keyword(s):  
Wage Inequality ◽  
Technical Change ◽  
Profit Maximization ◽  
Real Wages ◽  
Industrial Countries ◽  
Directed Technical Change ◽  
Initial Cost ◽  
Ricardian Model ◽  
Unskilled Workers ◽  
Factor Bias

We study the implications of offshoring on innovation, technology, and wage inequality in a Ricardian model with directed technical change. Profit maximization determines both the extent of offshoring and the direction of technological progress. A fall in the offshoring cost induces technical change with an ambiguous factor bias. When the initial cost of offshoring is high, an increase in offshoring opportunities causes a fall in the real wages of unskilled workers in industrial countries, skill-biased technical change and rising skill premia. When the offshoring cost is sufficiently low, instead, offshoring induces technical change biased in favor of the unskilled workers. (JEL J24, J31, L24, O33)

Industry Concentration and Wage Inequality: a Directed Technical Change Approach

2018 ◽  
Vol 30 (3) ◽  
pp. 457-481 ◽  
Author(s):  
Manuela Magalhães ◽  
Tiago Sequeira ◽  
Óscar Afonso
Keyword(s):  
Wage Inequality ◽  
Technical Change ◽  
Industry Concentration ◽  
Directed Technical Change

The role of IPRs on prices, wages and growth in a two country directed technical change model

2017 ◽  
Vol 19 (1) ◽  
Author(s):  
Óscar Afonso
Keyword(s):  
Growth Rate ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Wage Inequality ◽  
Technical Change ◽  
Technological Knowledge ◽  
Change Model ◽  
The Real ◽  
Directed Technical Change ◽  
Knowledge Bias

Abstract We develop a two country, Innovator and Follower, directed technical change model between tradable and nontradable sectors. The Innovator performs innovative R&D. The Follower imitates, in a pre-trade context, and adopts, in a trade scenario, the available technological knowledge. We start by considering the pre-trade context and then we analyze the trade scenario. In both regimes – imitation and adoption – and in BGP, international IPRs protection, R&D productivity, scale-effects intensity and substitutability between sectors determine the stable and unique worldwide economic growth rate and the technological-knowledge bias, which, in turn, affects relative prices and wages. Depending on IPRs protection, imitation and adoption can either amplify or slow down the technological-knowledge bias and thus the real exchange rate, the wage inequality and the worldwide growth rate. For example, under technological-knowledge adoption with positive international IPRs protection and substitutability, wages tend to be higher in the Innovator, technological knowledge and intra-country wage inequality are biased towards the tradable sector, and the real exchange rate accommodates the Balassa-Samuelson proposal.

scholarly journals Unpacking Skill Bias: Automation and New Tasks

2020 ◽  
Vol 110 ◽  
pp. 356-361
Author(s):  
Daron Acemoglu ◽  
Pascual Restrepo
Keyword(s):  
Technical Change ◽  
Canonical Model ◽  
Skill Premium ◽  
Real Wages ◽  
Skill Bias ◽  
The Past ◽  
Level Data ◽  
Unskilled Workers ◽  
Productivity Gains ◽  
Industry Level Data

We extend the canonical model of skill-biased technical change by modeling the allocation of tasks to factors and allowing for automation and the creation of new tasks. In our model, factor prices depend on the set of tasks they perform. Automation can reduce real wages and generate sizable changes in inequality associated with small productivity gains. New tasks can increase or reduce inequality depending on whether they are performed by skilled or unskilled workers. Industry-level data suggest that automation significantly contributed to the rising skill premium, while new tasks reduced inequality in the past but have contributed to inequality recently.

The Effects of Exogenous Technological Change on Wage Inequality in Rural India

2018 ◽  
Vol 19 (6) ◽  
pp. 1515-1537
Author(s):  
Arindam Banik ◽  
Pradip K. Bhaumik
Keyword(s):  
Wage Inequality ◽  
Poverty Reduction ◽  
Economic Benefits ◽  
Natural Setting ◽  
Skilled Workers ◽  
Economic Activities ◽  
Real Wages ◽  
Skilled Labour ◽  
Unskilled Labour ◽  
Unskilled Workers

This article develops a theoretical model that studies the economic benefits to skilled rural artisans receiving toolkits under a given poverty reduction programme. The model encompasses the frameworks for understanding the relationship between the supply of skilled labour (artisans) with improved toolkits, changes in rural economic activities and the relative incomes. Consequently, it provides a natural setting to infer their empirical relevance. The counterfactual analysis from a large sample of data reveals that once the toolkits are provided to the rural skilled artisans, the artisans as a broad social group are more likely to have benefited from the programme. Less benefit can be, but is not necessarily, associated with poor education level and other assets owned by the rural artisans. More interestingly, while the real wages of skilled workers are expected to rise due to the use of skill-biased toolkits, the wages of unskilled workers may either remain unaffected or even fall. The issue of supply of skilled labour has, therefore, become an area of immense interest largely because of the rising inequality in the relative wages of skilled and unskilled labour.

DIRECTED STRUCTURAL CHANGE

2017 ◽  
Vol 23 (5) ◽  
pp. 1921-1958
Author(s):  
Robert F. Kane
Keyword(s):  
Structural Change ◽  
Technical Progress ◽  
Technical Change ◽  
Relative Wage ◽  
Skilled Labor ◽  
Unskilled Labor ◽  
Directed Technical Change ◽  
Unskilled Workers ◽  
The Stability ◽  
The Relationship

This paper extends the existing theories of directed technical change by allowing the factors of production, skilled, and unskilled workers, to be employed in both the skill-intensive and unskilled-intensive sectors. Consequently, the direction of technical progress and the sectoral allocation of factors are jointly determined. The feedback between technical progress and the allocation of factors leads to new results concerning structural change and directed technical change. An increase in the endowment of a factor leads to a dynamic reallocation of factors toward the sector that uses the factor intensively. The reallocation of factors also affects the stability properties of directed technical change. When the parameter conditions necessary for strong bias are satisfied, the interior regime (nonspecialization) is at most locally stable. More importantly, if the relative endowment of skilled labor becomes too high (low), the economy necessarily specializes in the production of skilled (unskilled)-labor-intensive goods. Last, the relationship between the relative endowment of skilled labor and the steady-state relative wage rate is not necessarily monotonic.

scholarly journals On the evolution of wage inequality in Acemoglu's model of directed technical change

2009 ◽  
Vol 16 (6) ◽  
pp. 591-595
Author(s):  
Matthias Weiss
Keyword(s):  
Wage Inequality ◽  
Technical Change ◽  
Directed Technical Change

Directed Technical Change, Skills Gap and Predictability

2010 ◽  
Author(s):  
Ziemowit Bednarek
Keyword(s):  
Technical Change ◽  
Skills Gap ◽  
Directed Technical Change

North-South FDI, Directed Technical Change and Endogenous Growth

2015 ◽  
Author(s):  
Shang-ao Li ◽  
Shawn Chi
Keyword(s):  
Endogenous Growth ◽  
Technical Change ◽  
Directed Technical Change
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