Template-type: ReDIF-Paper 1.0
Author-Name: Yoko Asuyama
Author-Name-First: Yoko
Author-Name-Last: Asuyama
Author-Workplace-Name: Institute of Developing Economies, Japan External Trade Organization
Author-Name: Hideaki Goto
Author-Name-First: Hideaki
Author-Name-Last: Goto
Author-Workplace-Name: International University of Japan
Title: Negative Skill Sorting across Production Chains
Abstract: Previous literature generally predicts that individuals with higher skills work in industries with longer production chains. However, the opposite skill-sorting pattern, a "negative skill-sorting" phenomenon, is also observed in reality. This paper proposes a possible mechanism by which both cases can happen and shows that negative skill sorting is more likely to occur when the quality of intermediate inputs degrade rapidly (or improves slowly) along the production chain. We empirically confirm our theoretical prediction by using country-industry panel data. The results are robust regardless of estimation method, control variables, and industry coverage. This study has important implications for understanding countries' comparative advantages and development patterns.
Classification-JEL: J24, L23
Length: 24 pages
Creation-Date: 2016-03
Number: EMS_2016_04
File-URL: https://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2016_04.pdf
File-Format: Application/pdf
File-Function: First version, 2016
File-Size: 394KB
Keywords: Skill sorting, Input quality, Production chains
Handle: RePEc:iuj:wpaper:EMS_2016_04