Essays on the Labor Market Transitions in Taiwan.

Abstract

This dissertation consists of three chapters. The first chapter studies how the expansion in post-secondary education in 1990-2000 affected the university wage premium in Taiwan. We find that the university wage premium does not seem to plummet, which implies the relative demand for university-educated workers must have increased dramatically, absorbing almost entirely the increase in relative supply. Our calculations show that the change in industrial and occupational structures explains about 20-40% of the increase in demand, while changes in the average quality of university graduates due to this expansion have little explanatory power.

The second chapter studies how trade and outsourcing affect the demand for skilled labor in Taiwan between 1981 and 2011. We incorporate a global input-output system to construct a better measure of the factor content of trade, which includes the effect of outsourcing through trade in intermediate inputs. Since we have separate input-output tables for domestically produced and imported intermediate inputs, our global input-output system does not rely on the proportionality assumption. However, despite constructing the factor content of trade with care, our results still suggest that trade and outsourcing affect little the relative demand for skilled labor. We then explain that our results might be an underestimate: The coordination of outsourcing activities is often carried out by non-production workers, who tend to be skilled workers, but this effect is either inaccurately accounted for or excluded totally from our data.

The third chapter studies how the effect of family socioeconomic status (SES) on post-secondary education attainment changed during the expansion in post-secondary education in Taiwan, and we formulate a model which separates the distribution of educational attainment, which is determined by admission quotas, and the allocation of education among people with different levels of SES, which holds fixed admission quotas and is determined by factors such as admissions process and the optimization behavior of individuals. Our point estimates suggest an increase in the effect of SES on advancing to post-secondary education, but the standard errors are very large, making the increase statistically insignificant.