The Skill-Biased Effects of Exchange Rate Fluctuations

Kaiser, Boris; Siegenthaler, Michael (2016). The Skill-Biased Effects of Exchange Rate Fluctuations. Economic journal, 126(592), pp. 756-780. Wiley 10.1111/ecoj.12376

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This article examines the linkages between real exchange rate movements and firms' skill demand. Augmenting the model of Campa and Goldberg (2001) with heterogeneous labour, we show that exchange rate movements may affect unskilled workers differently than skilled workers because they change the relative price of imported inputs. Using panel data on Swiss manufacturers covering the period 1998–2012, we find that an appreciation increases high-skilled and reduces low-skilled employment in most firms. We present evidence consistent with our model that the skill-biased effects of exchange rates arise because unskilled labour is more substitutable with imported inputs than skilled labour.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Kaiser, Boris and Siegenthaler, Michael

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

0013-0133

Publisher:

Wiley

Language:

English

Submitter:

Eva Marina Zuberbühler

Date Deposited:

04 Jul 2017 16:25

Last Modified:

04 Jul 2017 16:25

Publisher DOI:

10.1111/ecoj.12376

BORIS DOI:

10.7892/boris.93180

URI:

https://boris.unibe.ch/id/eprint/93180

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