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Trade Liberalization and the Relative Wages for More‐Skilled Workers in Costa Rica

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  • Donald Robbins
  • T. H. Gindling

Abstract

A prominent argument regarding the effects of trade liberalization on the dispersion of wages in LDCs is that trade liberalization should lower the relative demand for more‐skilled workers by inducing between‐sector shifts towards sectors intensive in unskilled labor. Based on a disaggregating, nonparametric approach that imposes little structure on the data, the paper presents evidence that trade liberalization in Costa Rica led to an increase in relative demand. Other findings are consistent with the “skill‐enhancing‐trade hypothesis,” whereby trade liberalization induces an acceleration of physical capital imports, which raises relative demand through capital–skill complimentarily.

Suggested Citation

  • Donald Robbins & T. H. Gindling, 1999. "Trade Liberalization and the Relative Wages for More‐Skilled Workers in Costa Rica," Review of Development Economics, Wiley Blackwell, vol. 3(2), pages 140-154, June.
    • Handle: RePEc:bla:rdevec:v:3:y:1999:i:2:p:140-154
    DOI: 10.1111/1467-9361.00057
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    Cited by:

    1. T. H. Gindling & Katherine Terrell, 2004. "Minimum Wages, Inequality and Globalization," William Davidson Institute Working Papers Series 2004-700, William Davidson Institute at the University of Michigan.
    2. Francesco Quatraro & Marco Vivarelli, 2015. "Drivers of Entrepreneurship and Post-entry Performance of Newborn Firms in Developing Countries," The World Bank Research Observer, World Bank, vol. 30(2), pages 277-305.
    3. Quatraro, Francesco & Vivarelli, Marco, 2013. "Entrepreneurship In A Developing Country Context," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 201314, University of Turin.
    4. Vivarelli, Marco, 2018. "Globalisation, structural change and innovation in emerging economies: The impact on employment and skills," MERIT Working Papers 2018-037, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. Mauricio Bittencourt & Donald Larson & David Kraybill, 2010. "Regional Short-Run Effects Of Trade Liberalization In Brazil," Economic Systems Research, Taylor & Francis Journals, vol. 22(1), pages 65-85.
    6. Sylvain Chabe-Ferret & Julien Gourdon & Mohamed Ali Marouani & Tancrède Voituriez, 2007. "Trade-Induced Changes in Economic Inequality: Assessment Issues and Policy Implications for Developing Countries," Working Papers DT/2007/11, DIAL (Développement, Institutions et Mondialisation).
    7. Zuniga, Pluvia & Crespi, Gustavo, 2013. "Innovation strategies and employment in Latin American firms," Structural Change and Economic Dynamics, Elsevier, vol. 24(C), pages 1-17.
    8. Richard B. Freeman, 2004. "Trade Wars: The Exaggerated Impact of Trade in Economic Debate," The World Economy, Wiley Blackwell, vol. 27(1), pages 1-23, January.
    9. Vivarelli, Marco, 2014. "Structural Change and Innovation as Exit Strategies from the Middle Income Trap," IZA Discussion Papers 8148, Institute of Labor Economics (IZA).
    10. Marco Vivarelli, 2014. "The Middle Income Trap: A Way Out Based on Technological and Structural Change," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1403, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    11. Francesco Quatraro & Marco Vivarelli, 2013. "Entry and Post-Entry Dynamics in Developing Countries," GREDEG Working Papers 2013-20, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    12. Vivarelli, Marco, 2012. "Drivers of entrepreneurship and post-entry performance : microeconomic evidence from advanced and developing countries," Policy Research Working Paper Series 6245, The World Bank.
    13. Vivarelli, Marco, 2012. "Entrepreneurship in Advanced and Developing Countries: A Microeconomic Perspective," IZA Discussion Papers 6513, Institute of Labor Economics (IZA).

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