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dc.contributor.authorRaveh, Ohad
dc.contributor.authorReshef, A.
dc.date.accessioned2018-02-01T05:25:40Z
dc.date.available2018-02-01T05:25:40Z
dc.date.created2018-02-01T04:59:49Z
dc.date.issued2016
dc.identifier.citationRaveh, O. and Reshef, A. 2016. Capital imports composition, complementarities, and the skill premium in developing countries. Journal of Development Economics. 118: pp. 183-206.
dc.identifier.urihttp://hdl.handle.net/20.500.11937/62826
dc.identifier.doi10.1016/j.jdeveco.2015.07.011
dc.description.abstract

© 2015 Elsevier B.V.We study how the composition of capital imports affects relative demand for skill and the skill premium in a sample of developing economies. Capital imports per se do not affect the skill premium; in contrast, their composition does. While imports of R&D-intensive capital equipment raise the skill premium, imports of less innovative equipment lower it. We estimate that R&D-intensive capital is complementary to skilled workers, whereas less innovative capital equipment is complementary to unskilled labor-which explains the composition effect. This mechanism has substantial explanatory power. Variation in tariffs, freight costs and overall barriers to trade, over time and across types of capital, favors imports of skill-complementary capital over other types. We calculate that reductions in barriers to trade increase inequality substantially in developing countries through the composition channel.

dc.publisherElsevier BV
dc.relation.urihttp://www.elsevier.com/locate/issn/03043878
dc.titleCapital imports composition, complementarities, and the skill premium in developing countries
dc.typeJournal Article
dcterms.source.volume118
dcterms.source.startPage183
dcterms.source.endPage206
dcterms.source.issn0304-3878
dcterms.source.titleJournal of Development Economics
curtin.accessStatusFulltext not available


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