Industry-specific human capital, knowledge labour, and industry wage structure in Taiwan

Abstract

This paper investigates the role of industry-specific human capital (ISHC) in determining industry wage structure. The model presented in this paper distinguishes between knowledge labour and physical labour. Knowledge labour is physical labour embodied with ISHC. It is postulated that more ISHC-intensive industries, such as high-tech industries, pay higher wages and the wage premiums increase with workers' experience. The hypothesis is tested using a merged sample of 1997-1999 manpower utilization survey data from a newly industrialized economy-Taiwan. The findings show support for the effect of ISHC.