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Trade liberalization, technology, relative factor supplies and the relative wage: evidence from the South

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  • Tahir Abdi
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    Abstract

    There is much controversy about the role that trade liberalization, technological change and relative factor supplies have played in bringing about changes in the relative wage of the unskilled workers. Much of the empirical work on this issue has focused on the industrial countries and paid little attention to developing countries. To fill this gap, this study develops a special data set to examine the relative wage behaviour of a large number of developing countries. An empirical model based on the theory is used to test different explanations of the relative wage change. As predicted by the technology explanation, the empirical analysis in the study finds a significant negative link between the relative wage of unskilled workers and the technology index. The analysis, however, does not find a significant role for labour supplies or trade liberalization in determining the relative wage of unskilled-skilled workers.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/00036840600567660
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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Applied Economics.

    Volume (Year): 39 (2007)
    Issue (Month): 19 ()
    Pages: 2451-2463

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    Handle: RePEc:taf:applec:v:39:y:2007:i:19:p:2451-2463

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    Cited by:
    1. Choi, E. Kwan, 2011. "To integrate with a high- or low-wage country: That is the question," International Review of Economics & Finance, Elsevier, vol. 20(4), pages 792-799, October.
    2. Mah, Jai S., 2013. "Globalization, decentralization and income inequality: The case of China," Economic Modelling, Elsevier, vol. 31(C), pages 653-658.

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