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Open trade and skilled and unskilled labor productivity in developing countries: A panel data analysis


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  • Sohrab Abizadeh
  • Mehmet Serkan Tosun


This paper examines the effect of trade openness on the productivity of skilled and unskilled labor in a group of 36 developing countries using panel data and fixed effect approach. We have developed and utilized an empirical model that readily lends itself to testing the hypothesis posed. Our results support the hypothesis that trade openness has a positive and significant impact on labor productivity for both skilled and unskilled labor in the sample countries. We also observe that the beneficial effect of trade openness is relatively stronger for the skilled labor than the unskilled labor. We conclude that contrary to the claim made by Mayda and Rodrik (2001), skilled workers in developing countries may oppose protectionism. When adjusting for the purchasing power parity, the impact of trade openness on labor productivity, although positive and significant, is not as pronounced as it is for other definitions of openness.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal The Journal of International Trade & Economic Development.

Volume (Year): 16 (2007)
Issue (Month): 3 ()
Pages: 383-399

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Handle: RePEc:taf:jitecd:v:16:y:2007:i:3:p:383-399

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Keywords: Trade openness; productivity; skilled labor; unskilled labor; developing countries; panel data;


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Cited by:
  1. Sohrab Abizadeh & Manish Pandey & Mehmet Serkan Tosun, 2007. "Impact of Trade on Productivity of Skilled and Unskilled Intensive Industries: A Cross-Country Investigation," Working Papers 07-007, University of Nevada, Reno, Department of Economics & University of Nevada, Reno , Department of Resource Economics.


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