Machines and Machinists: Capital-Skill Complementarity from an International Trade Perspective
Year: 2011
Type: preprint
Study design: Observational Study
Abstract: We estimate the effect of imported machines on the wages of machine operators utilizing Hungarian linked employer-employee data. We infer exposure to imported machines from detailed trade statistics of the firm and the occupation description of the worker. We find that workers exposed to imported machines earn about 8 percent higher wages than other machine operators at the same firm. When we proxy for unobserved worker characteristics, we find a significant 3 percent wage premium, suggesting that the relationship is causal. The return to schooling is also higher on imported machines. We build a simple matching model consistent with these findings. Our findings suggest that machine imports can be an important channel through which skill-biased technical change reaches less developed and emerging economies.
Authors: Miklós Koren, Márton Csillag
Institutions: Central European University, Maastricht University
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: green
Funder: European Commission
OpenAlex ID: W2140799438