The Effect Of Trade Technological Contents On Skill Premium

Between workers at different skill levels,the income gaps are expanding.How can this phenomenon be explained?This thesis argues that whether participating in international trade or not,a company has a great influence on the income levels of its workers.Enterprises participating in international trade will continue to upgrade their technological contents.As a result,these companies will experience skill-biased technological progress.This will lead to the division of skill needs,higher efficiency of internal skills and labor,and higher wage rates for high-skilled workers than for low-skilled workers.Moreover,the technological contents of import and export commodities of trading companies will have spillover effects on non-tradable companies,which will in turn increase the relative wages of skilled workers in non-trade enterprises.Through biased technological progress,the thesis firstly deduces the mechanism of trade technological contents affecting sectoral skill premia.Based on the theoretical model,an empirical regression model is set up.Using BACI-CEPII database,the sectoral export and import technological complexity indexes are calculated.Then referring to WWYZ(2017),I make use of the WIOD(2013)to calculate the global value chain participation indexes to modify the a'bove two technological complexity indexes.Through the fixed effect model and GMM method,I examine the effect of trade technological contents on skill premium through biased technological progress under trade liberalization conditions.The empirical results show that:(1)If we take no account of sector characteristics,the upgrading of trade technological contents significantly promote the relative incomes of high-skilled labors,but the complexities of imported technologies weaken the role of export technological complexities in promoting skill premia.Foreign direct investments promote skill premium but weaken the positive effect of export technological complexities on skill premium.(2)If we take account of sector characteristics,differences in the concentration of industry factors and the degrees of embedding in global value chain will lead to different effects of trade technological contents on the relative income gaps in the labor forces.Technological complexities of export promote skill premium in industries,while import technological complexities have different influences;in all industries,foreign direct investments have a catalytic effect,but in the labor-intensive industries and capital-intensive industries,reduces the promotion effect of export technological complexities.The empirical conclusions indicate that the government policy packages for promoting salaries of labor can be included:Encouraging export and import trade,especially technology-intensive enterprises exporting,importing high-tech products,and attracting foreign investors into technology-intensive industries;Technological progress can increase the overall labor income level.Enterprises should absorb foreign advanced technologies and strengthen R&D capabilities to enhance their own competitiveness.In order to increase wages of all workforces,individuals should keep learning advanced knowledge and management experience.Finally,compared with the existing literatures,the characteristics of this thesis is:(1)From the perspective of structural changes in commodities trading technologies,I examine the impact of trade liberalization on skill premium.I refer to WWYZ(2017)for removing intermediate inputs in Hausmann et al.(2007)trade technological contents of industries.(2)The thesis takes both account and no account of sector characteristics,using the fixed effect model and GMM method,and empirically compares the impact of export and import technological complexities and foreign direct investments on industrial skill premium,and the effect of import technological complexities and foreign direct investments on the promotion effect of export technological complexities on skill premium.(3)There are two methods in the endogenous test,namely,substituting all explanatory variables by one period lagging ones and introducing instrumental variables into the regression;the robustness test coming from the three angles:using different trade technological contents measurement methods,eliminating abnormal sample points and using dynamic panel estimating.