Trends in Tariff Reforms and Trends in Wage Inequality

The authors provide new evidence on the impacts of trade reforms on wages and wage inequality in developing countries. While most of the current literature on the topic achieves identification by comparing outcomes before and after one episode of trade liberalization across industries, they propose a stronger identifying strategy. The authors explore the recent historical record of policy changes adopted by Argentina: from significant protection in the early 1970s, to the first episode of liberalization during the late 1970s, back to a slowdown of reforms during the 1980s, to the second episode of liberalization in the 1990s. These swings in trade policy comprise broken trends in trade reforms that they can compare with observed trends in wages and wage inequality. After setting up unusual historical data sets of trends in tariffs, trends in wages, and trends in wage inequality, the evidence supports two well-known hypotheses: trade liberalization, other things being equal, (1) has reduced wages, and (2) has increased wage inequality.

Bibliographic Details

Main Authors:	Galiano, Sebastian, Porto, Guido G.
Language:	English
Published:	World Bank, Washington, DC 2006-05
Subjects:	AGGREGATE SHOCKS, ANTI-DUMPING MEASURES, AVERAGE TARIFF, AVERAGE TARIFFS, AVERAGE WAGES, BUSINESS CYCLE, CAPITAL GOODS, CHANGES IN TRADE, COLLEGE EDUCATION, COMMERCIAL POLICY, CUSTOMS, DEBT, DEBT CRISIS, DEMAND CURVE, DEREGULATION, DEVELOPMENT ECONOMICS, DUMPING, EARNINGS REGRESSIONS, ECONOMETRIC MODELS, ECONOMIC HISTORY, EDUCATIONAL ATTAINMENT, ELASTICITY, EMPLOYMENT LEVEL, EMPLOYMENT STATUS, EXCHANGE RATES, EXTERNAL TARIFF, FOREIGN COMPETITION, FULL LIBERALIZATION, GDP, HOUSEHOLD SURVEY, HOUSEHOLD SURVEYS, HUMAN CAPITAL, IMPACT OF TRADE, IMPACT OF TRADE LIBERALIZATION, IMPACT OF TRADE REFORMS, IMPORT PENETRATION, IMPORT PRICE, IMPORT TARIFF, IMPORT TARIFFS, IMPORT TAXES, IMPORTS, INCOME INEQUALITY, INDUSTRIAL POLICIES, INDUSTRY CHARACTERISTICS, INDUSTRY WAGE, INDUSTRY WAGES, INTERNATIONAL ECONOMICS, INTERNATIONAL TRADE, LABOR DEMAND, LABOR EARNING, LABOR ECONOMICS, LABOR FORCE, LABOR MARKET, LABOR MARKETS, LABOR REGULATION, LABOR REGULATIONS, LABOR RELATIONS, LABOR SHARE, LABOR SUPPLY, LABOR SURVEYS, LIBERALIZATION OF TRADE, LOW TARIFFS, NON-TARIFF BARRIERS, OPENNESS, POLITICAL ECONOMY, POSITIVE EFFECTS, PRIMARY EDUCATION, QUANTITATIVE RESTRICTIONS, REAL WAGES, REDUCTION IN TARIFFS, REGIONAL TRADE, SEMISKILLED LABOR, SEMISKILLED WORKERS, SKILL PREMIUM, SKILLED WAGE PREMIUM, STATISTICAL DATA, SUPPLY CURVE, SUPPLY CURVES, TARIFF BARRIERS, TARIFF CLASSIFICATION, TARIFF CUTS, TARIFF LEVELS, TARIFF PROTECTION, TARIFF RATE, TARIFF REDUCTION, TARIFF REFORM, TARIFF REFORMS, TARIFF SCHEDULES, TRADE AGREEMENT, TRADE BARRIERS, TRADE DATA, TRADE FORUM, TRADE LIBERALIZATION, TRADE POLICIES, TRADE POLICY, TRADE POLICY REFORMS, TRADE PROTECTION, TRADE REFORM, TRADE REFORMS, UNEMPLOYMENT, UNSKILLED LABOR, UNSKILLED WORKER, UNSKILLED WORKERS, WAGE DATA, WAGE INEQUALITY, WAGE PREMIUMS, WAGES, WORKER,
Online Access:	http://documents.worldbank.org/curated/en/2006/05/6759743/trends-tariff-reforms-trends-wage-inequality https://hdl.handle.net/10986/8684
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