Recent Twists of the Wage Structure and Technology Diffusion
March 1994
Working Paper Number:
CES-94-05
Abstract
This paper is an empirical study of the impact on U.S. wage structure of domestic technology, foreign technology, and import penetration. A model is presented which combines factor proportions theory with a version of growth theory. The model, which assumes two levels of skill, suggests that domestic technology raises both wages, while foreign technology, on a simple interpretation, lowers both. Trade at a constant technology, as usual, lowers the wage of that class of labor used intensively by the affected industry, and raises the other wage. The findings support the predictions of the model for domestic technology. On the other hand, they suggest that technological change, and perhaps other factors, have obscured the role of factor proportions in the data. Indeed, foreign technology and trade have the same effect on wages at different skill levels, not the opposite effects suggested by factor proportions. Finally, a simple diffusion story, in which foreign technology lowers all U.S. wages, is also rejected. Instead, uniformly higher U.S. wages, not lower, appear to be associated with the technology and trade of the oldest trading partners of the U.S., the economies of the West. Not so for Asia, especially the smaller countries which have recently accelerated their trade with the U.S. Their effects are uniformly negative on wages, suggesting a distinction between shock and long run effects of foreign technology and trade.
Document Tags and Keywords
Keywords
Keywords are automatically generated using KeyBERT, a powerful and innovative
keyword extraction tool that utilizes BERT embeddings to ensure high-quality and contextually relevant
keywords.
By analyzing the content of working papers, KeyBERT identifies terms and phrases that capture the essence of the
text, highlighting the most significant topics and trends. This approach not only enhances searchability but
provides connections that go beyond potentially domain-specific author-defined keywords.
:
economist,
manufacturing,
technology,
growth,
technological,
import,
foreign trade,
commodity,
labor,
monopolistically,
efficiency,
sector,
tariff,
factory,
foreign,
agriculture,
country,
regressors,
wage effects,
effect wages,
industry wages,
wage growth
Tags
Tags are automatically generated using a pretrained language model from spaCy, which excels at
several tasks, including entity tagging.
The model is able to label words and phrases by part-of-speech,
including "organizations." By filtering for frequent words and phrases labeled as "organizations", papers are
identified to contain references to specific institutions, datasets, and other organizations.
:
Cobb-Douglas,
Current Population Survey,
World Bank
Similar Working Papers
Similarity between working papers are determined by an unsupervised neural
network model
know as Doc2Vec.
Doc2Vec is a model that represents entire documents as fixed-length vectors, allowing for the
capture of semantic meaning in a way that relates to the context of words within the document. The model learns to
associate a unique vector with each document while simultaneously learning word vectors, enabling tasks such as
document classification, clustering, and similarity detection by preserving the order and structure of words. The
document vectors are compared using cosine similarity/distance to determine the most similar working papers.
Papers identified with 🔥 are in the top 20% of similarity.
The 10 most similar working papers to the working paper 'Recent Twists of the Wage Structure and Technology Diffusion' are listed below in order of similarity.
-
Working PaperAcademic Science, Industrial R&D, and the Growth of Inputs🔥
January 1993
Working Paper Number:
CES-93-01
This paper is a theoretical and empirical investigation of the connection between science, R&D, and the growth of capital. Studies of high technology industries and recent labor studies agree in assigning a large role to science and technology in the growth of human and physical capital, although direct tests of these relationships have not been carried out. This paper builds on the search approach to R&D of Evenson and Kislev (1976) to unravel the complex interactions between science, R&D, and factor markets suggested by these studies. In our theory lagged science increases the returns to R&D, so that scientific advance later feeds into growth of R&D. In turn, product quality improvements and price declines lead to the growth of industry by shifting out new product demand, perhaps at the expense of traditional industries. All this tends to be in favor of the human and physical capital used intensively by high technology industries. This is the source of the factor bias which is implicit in the growth of capital per head. Our empirical work overwhelmingly supports the contention that growth of labor skills and physical capital are linked to science and R&D. It also supports the strong sequencing of events that is a crucial feature of our model, first from science to R&D, and later to output and factor markets.View Full Paper PDF
-
Working PaperScience, R&D, And Invention Potential Recharge: U.S. Evidence🔥
January 1993
Working Paper Number:
CES-93-02
The influence of academic science on industrial R&D seems to have increased in recent years compared with the pre-World War II period. This paper outlines an approach to tracing this influence using a panel of 14 R&D performing industries from 1961-1986. The results indicate an elasticity between real R&D and indicators of stocks of academic science of about 0.6. This elasticity is significant controlling for industry effects. However, the elasticity declines from its level during the 1961-1973 subperiod, when it was 2.2, to 0.5 during the 1974-1986 subperiod. Reasons for the decline include exogenous and endogenous exhaustion of invention potential, and declining incentives to do R&D stemming from a weakening of intellectual property rights. The growth of R&D since the mid-1980s suggests a restoration of R&D incentives in still more recent times.View Full Paper PDF
-
Working PaperINTERNATIONAL PATENTING STRATEGIES WITH HETEROGENEOUS FIRMS
September 2014
Working Paper Number:
CES-14-28
This paper analyzes how firms decide where to patent in a heterogeneous firm model of trade with endogenous rival entry. In the model, innovating firms compete with rival firms on price, where rivals force the innovating firm to reduce markups and lower the innovating firm's probability of obtaining monopolistic profits. Patenting allows the innovating firm to reduce the number of rival rms by increasing their fixed overhead costs, thereby providing higher expected profits and increased markups from reduced competition. Countries with higher states of technology, more competition and better patent protection have a greater proportion of entrants who patent. Industries tend to follow a U-shaped pattern of patenting where industries with high heterogeneity in production and low substitution, along with industries with low heterogeneity in production and high substitution patent more frequently. Using a generalized framework of the model, I estimate market-based measures of country-level patent protection, which when compared with other IP indices, suggests that not enough international patenting is taking place. Finally, I test the predictions of the model using a newly available technology-to-industry concordance on bilateral patent flows and show that firms are increasingly sensitive to foreign IP protection. Countries that choose to maximize their IP protection can increase the number of foreign patents by almost 10%.View Full Paper PDF
-
Working PaperImmigration, Skill Mix, and the Choice of Technique
May 2005
Working Paper Number:
CES-05-04
Using detailed plant- level data from the 1988 and 1993 Surveys of Manufacturing Technology, this paper examines the impact of skill mix in U.S. local labor markets on the use and adoption of automation technologies in manufacturing. The level of automation differs widely across U.S. metropolitan areas. In both 1988 and 1993, in markets with a higher relative availability of lessskilled labor, comparable plants ' even plants in the same narrow (4-digit SIC) industries ' used systematically less automation. Moreover, between 1988 and 1993 plants in areas experiencing faster less-skilled relative labor supply growth adopted automation technology more slowly, both overall and relative to expectations, and even de-adoption was not uncommon. This relationship is stronger when examining an arguably exogenous component of local less-skilled labor supply derived from historical regional settlement patterns of immigrants from different parts of the world. These results have implications for two long-standing puzzles in economics. First, they potentially explain why research has repeatedly found that immigration has little impact on the wages of competing native-born workers at the local level. It might be that the technologies of local firms'rather than the wages that they offer'respond to changes in local skill mix associated with immigration. A modified two-sector model demonstrates this theoretical possibility. Second, the results raise doubts about the extent to which the spread of new technologies have raised demand for skills, one frequently forwarded hypothesis for the cause of rising wage inequality in the United States. Causality appears to at least partly run in the opposite direction, where skill supply drive s the spread of skill-complementary technology.View Full Paper PDF
-
Working PaperR&D Reactions To High-Technology Import Competition
March 1991
Working Paper Number:
CES-91-02
For a seventeen-year panel covering 308 U.S. manufacturing corporations, we analyze firms' R&D spending reactions to changes in high-technology imports. On average, companies reduced their R&D/sales ratios in the short run as imports rose. Individual company reactions were heterogeneous, especially for multinational firms. Short-run reactions were more aggressive (i.e., tending toward R&D/sales ratio increases), the more concentrated the markets were in which the companies operated, the larger the company was, and the more diversified the firm's sales mix was. Reactions were less aggressive when special trade barriers had been erected or patent protection was strong in the impacted industries. Companies with a top executive officer educated in science or engineering were more likely to increase R&D/sales ratios in response to an import shock, all else equal. Over the full 17-year sample period, reactions may have shifted toward greater average aggressiveness.View Full Paper PDF
-
Working PaperImpacts of Trade on Wage Inequality in Los Angeles: Analysis Using Matched Employer-Employee Data
April 2006
Working Paper Number:
CES-06-12
Over the past twenty-five years, earnings inequality has risen dramatically in the US, reversing trends of the preceding half-century. Growing inequality is closely tied to globalization and trade through the arguments of Heckscher-Ohlin. However, with only few exceptions, empirical studies fail to show that trade is the primary determinant of shifts in relative wages. We argue that lack of empirical support for the trade-inequality connection results from the use of poor proxies for worker skill and the failure to control for other worker characteristics and plant characteristics that impact wages. We remedy these problems by developing a matched employer-employee database linking the Decennial Household Census (individual worker records) and the Longitudinal Research Database (individual manufacturing establishment records) for the Los Angeles CMSA in 1990 and 2000. Our results show that trade has a significant impact on wage inequality, pushing down the wages of the less-skilled while allowing more highly skilled workers to benefit from exports. That impact has increased through the 1990s, swamping the influence of skill-biased technical change in 2000. Further, the negative effect of trade on the wages of the less-skilled has moved up the skill distribution over time. This suggests that over the long-run, increasing levels of education may not insulate more skilled workers within developed economies from the impacts of trade.View Full Paper PDF
-
Working PaperThe Structure of Firm R&D and the Factor Intensity of Production
October 1997
Working Paper Number:
CES-97-15
This paper studies the influence of the structure of firm R&D, industry R&D spillovers, and plant level physical capital on the factor intensity of production. By the structure of firm R&D we mean its distribution across states and products. By factor intensity we mean the cost shares of variable factors, which in this paper are blue collar labor, white collar labor, and materials. We characterize the effect of the structure of firm R&D on factor intensity using a Translog cost function with quasi-fixed factors. This cost function gives rise to a system of variable cost shares that depends on factor prices, firm and industry R&D, and physical capital.View Full Paper PDF
-
Working PaperAN 'ALGORITHMIC LINKS WITH PROBABILITIES' CONCORDANCE FOR TRADEMARKS: FOR DISAGGREGATED ANALYSIS OF TRADEMARK & ECONOMIC DATA
September 2013
Working Paper Number:
CES-13-49
Trademarks (TMs) shape the competitive landscape of markets for goods and services in all countries through branding and conveying information and quality inherent in products. Yet, researchers are largely unable to conduct rigorous empirical analysis of TMs in the modern economy because TM data and economic activity data are organized differently and cannot be analyzed jointly at the industry or sectoral level. We propose an 'Algorithmic Links with Probabilities' (ALP) approach to match TM data to economic data and enable these data to speak to each other. Specifically, we construct a NICE Class Level concordance that maps TM data into trade and industry categories forward and backward. This concordance allows researchers to analyze differences in TM usage across both economic and TM sectors. In this paper, we apply this ALP concordance for TMs to characterize patterns in TM applications across countries, industries, income levels and more. We also use the concordance to investigate some of the key determinants of international technology transfer by comparing bilateral TM applications and bilateral patent applications. We conclude with a discussion of possible extensions of this work, including deeper indicator-level concordances and further analyses that are possible once TM data are linked with economic activity data.View Full Paper PDF
-
Working PaperLearning by Doing and Plant Characteristics
August 1996
Working Paper Number:
CES-96-05
Learning by doing, especially spillover learning, has received much attention lately in models of industry evolution and economic growth. The predictions of these models depend on the distribution of learning abilities and knowledge flows across firms and countries. However, the empirical literature provides little guidance on these issues. In this paper, I use plant level data on a sample of entrants in SIC 38, Instruments, to examine the characteristics associated with both proprietary and spillover learning by doing. The plant level data permit tests for the relative importance of within and between firm spillovers. I include both formal knowledge, obtained through R&D expenditures, and informal knowledge, obtained through learning by doing, in a production function framework. I allow the speed of learning to vary across plants according to characteristics such as R&D intensity, wages, and the skill mix. The results suggest that (a) Ainformal@ knowledge, accumulated through production experience at the plant, is a much more important source of productivity growth for these plants than is Aformal@ knowledge gained via research and development expenditures, (b) interfirm spillovers are stronger than intrafirm spillovers, (c) the slope of the own learning curve is positively related to worker quality, (d) the slope of the spillover learning curve is positively related to the skill mix at plants, (e) neither own nor spillover learning curve slopes are related to R&D intensities. These results imply that learning by doing may be, to some extent, an endogenous phenomenon at these plants. Thus, models of industry evolution that incorporate learning by doing may need to be revised. The results are also broadly consistent with the recent growth models.View Full Paper PDF
-
Working PaperAn Applied General Equilibrium Model Of Moroccan Trade Liberalization Featuring External Economies
November 1997
Working Paper Number:
CES-97-16
Since the 1920's economists have wrestled with the effects of external economies on trade liberalization. In this paper I show that under extreme conditions, externalities can reverse the gains from trade found in perfectly competitive trade models. However, the externalities needed to generate this result, even under the worst possible conditions (all expanding industries are subject to negative externalities, all contracting industries have positive externalities) are orders of magnitude larger than those estimated in Krizan (1997). This suggests that the presence of external economies of scale does not provide a credible argument for protectionism. On the other hand, the CGE model showed that external effects can increase the welfare gains from trade liberalization, but the combined effect is still small compared to other policy options. This finding contrasts sharply with many models featuring internal returns to scale that are able to generate large welfare benefits from trade liberalization.View Full Paper PDF
