Testing for the Impact of Skill-based Technologies on Employment of the Workforce in Iran

Abstract

On one hand, the skill-based technologies increase productivity and output, reduce inflation and raise income. On the other hand, human skills are essential for implementing, adopting, utilizing physically and practically of modern and imported technologies and serve a complementary role in this respect. In the present paper, an attempt has been made to evaluate the relationship between the domestic research and development capital stock and technology imports with skilled and unskilled workers in Iran from 1971 to 2006. To do this, a translog cost function was estimated with seemingly unrelated regression method. The results indicate that the technology and its spillover are complementary to the skilled labor and substitute for the unskilled worker. In addition, the results illustrate the existence of a complementary relationship between capital and skilled labor and a substitution one with capital and unskilled worker.

Keywords

• j21
• j24
• cost function
• employment
• skilled and unskilled labor demand
• technology imports
• research and development jel classification: o3
• j21
• j24