@TechReport{iza:izadps:dp596, author={Görg, Holger and Strobl, Eric}, title={Relative Wages, Openness and Skill-Biased Technological Change}, year={2002}, month={Oct}, institution={Institute of Labor Economics (IZA)}, address={Bonn}, type={IZA Discussion Paper}, number={596}, url={https://www.iza.org/publications/dp596}, abstract={Standard neo-classical trade theory predicts that trade liberalisation should cause a fall in wage inequality in developing countries through a decrease in the relative demand for skilled labour. Recent studies of a number of developing countries, however, find evidence to the contrary. Using a panel of manufacturing firms in the 1990s we investigate whether skillbiased technological change induced through imports of technology-intensive capital goods or export activity may provide an explanation for the increase in relative wages of skilled workers in Ghana. Estimates of a skilled worker relative demand equation based on a translog cost function show that changes in technology through a greater inflow of foreign machinery is found to be indeed consistent with skill-biased technological change in Ghana. }, keywords={wage inequality;trade liberalisation;skill-biased technological change}, }