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Contents Introduction

This paper investigates the effect of foreign ownership, international trade, and technology-embodied capital on the demand for skilled labor relative to unskilled labor (the relative demand for skilled labor) using plant-level data for Thai manufacturing in 1996. The results first indicate that foreign MNC plants tend to have significantly higher relative demand for skilled labor than Thai plants in several industries. Second, the relative demand for skilled labor is negatively and significantly correlated with export propensities but there is no significant correlation with import propensities. Third, office equipment capital is significantly and positively correlated with the relative demand for skilled labor, however, the correlation with machinery capital is significantly negative in many industries, suggesting machinery may embody technologies with a bias toward unskilled labor. These results suggest that patterns observed in developed countries and related theories may not always apply in the Thai case.