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Trade Liberalization and the Wage Skill Premium: Evidence from Indonesia

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  • Amiti, Mary
  • Cameron, Lisa

Abstract

In this paper, we analyze the effect of reducing import tariffs on intermediate inputs and final goods on the wage skill premium within firms in Indonesia – a country with a high share of unskilled workers. We present a new finding that reducing input tariffs reduces the wage skill premium within firms that import their intermediate inputs. However, we do not find significant effects from reducing tariffs on final goods on the wage skill premium within firms.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 87 (2012)
Issue (Month): 2 ()
Pages: 277-287

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Handle: RePEc:eee:inecon:v:87:y:2012:i:2:p:277-287

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Web page: http://www.elsevier.com/locate/inca/505552

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Keywords: wage inequality; skill premium; import tariffs; intermediate inputs;

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References

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  1. Andrew B. Bernard & Stephen Redding & Peter K. Schott, 2004. "Comparative advantage and heterogeneous firms," LSE Research Online Documents on Economics 3700, London School of Economics and Political Science, LSE Library.
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Citations

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Cited by:
  1. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2011. "The Empirics of Firm Heterogeneity and International Trade," CEP Discussion Papers dp1084, Centre for Economic Performance, LSE.
  2. Liu, Dan, 2013. "International trade and wage inequality: A non-monotonic relationship," Economics Letters, Elsevier, vol. 121(2), pages 244-246.
  3. Jayanthakumaran, Kankesu & Sangkaew, Piyapong & O’Brien, Martin, 2013. "Trade liberalisation and manufacturing wage premiums: Evidence from Thailand," Journal of Asian Economics, Elsevier, vol. 29(C), pages 15-23.
  4. Ana Cecília Fieler & Marcela Eslava & Daniel Xu, 2014. "Trade, Skills, and Quality Upgrading: A Theory with Evidence from Colombia," NBER Working Papers 19992, National Bureau of Economic Research, Inc.
  5. Massimiliano Calì, 2012. "Trade Liberalisation Does Not Always Raise Wage Premia: Evidence from Ugandan Districts," SERC Discussion Papers 0114, Spatial Economics Research Centre, LSE.
  6. Rosario Crinò, 2011. "Imported Inputs and Skill Upgrading," Development Working Papers 323, Centro Studi Luca d\'Agliano, University of Milano, revised 27 Dec 2011.
  7. Sadayuki Takii & Dionisius Narjoko, . "Revisiting How Globalization Affects Wage Skill Premium in Indonesia Manufacturing," Chapters, Economic Research Institute for ASEAN and East Asia (ERIA).
  8. Tanaka, Ayumu, 2013. "The causal effects of exporting on domestic workers: A firm-level analysis using Japanese data," Japan and the World Economy, Elsevier, vol. 28(C), pages 13-23.
  9. L. Alan Winters, 2014. "Globalization, Infrastructure, and Inclusive Growth," Development Economics Working Papers 23974, East Asian Bureau of Economic Research.
  10. Rafaelita Aldaba, . "Impact of Trade Liberalization on Wage Skill Premium in Philippine Manufacturing," Chapters, Economic Research Institute for ASEAN and East Asia (ERIA).
  11. Archanun Kohpaiboon & Juthatip Jongwanich, . "Global Production Sharing and Wage Premium: Evidence from Thai Manufacturing," Chapters, Economic Research Institute for ASEAN and East Asia (ERIA).
  12. Kis-Katos, Krisztina & Sparrow, Robert, 2013. "Poverty, Labour Markets and Trade Liberalization in Indonesia," IZA Discussion Papers 7645, Institute for the Study of Labor (IZA).
  13. Hiroyuki Kasahara & Yawen Liang & Joel Rodrigue, 2013. "Does Importing Intermediates Increase the Demand for Skilled Workers? Plant-level Evidence from Indonesia," CESifo Working Paper Series 4463, CESifo Group Munich.
  14. Baumgarten, Daniel, 2013. "Exporters and the rise in wage inequality: Evidence from German linked employer–employee data," Journal of International Economics, Elsevier, vol. 90(1), pages 201-217.
  15. Chin Hee Hahn & Dionisius Narjoko, . "Introduction and Overview," Chapters, Economic Research Institute for ASEAN and East Asia (ERIA).

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