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Wage Structure Effects of Taiwan's Science and Technology Development Policy

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This article extends the demand shift analysis of Katz and Murphy (1992) to examine the impact of Taiwan's science and technology development policy on the wage structure between 1979 and 1998. Changes in factor demand are required to account for changes in the wage structure throughout this time. Decomposing factor demand shifts by industry reveal that for men with a vocational college education, the policy can account for 30 percent of the increase in demand; for a university qualification, the amount is 20 percent. It is argued that the policy effect was mostly exogenous.
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Keywords: J31; O38; O53; Taiwan; labor demand; technology; wage structure

Document Type: Research Article

Affiliations: School of Economics and Finance, University of Hong Kong

Publication date: June 1, 2005

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