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Trade and Income Distribution in Developing Countries

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  • Litwin, Carol

    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

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    Abstract

    This study examines the relationship between trade policy and income distribution on a cross-section of developing countries. The evidence suggests that the impact of openness on income distribution depends on the endowments of human capital. Basic education was found to be the key human capital variable determining export composition. Countries relatively well endowed with basic education tend to have higher shares of manufacturing exports and experience lower income inequality than countries with high shares of primary exports. These findings suggest that trade policies promoting manufactures should be based on expanding basic education to have the necessary poverty and inequality reducing effects.

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    File URL: http://swopec.hhs.se/gunwpe/papers/gunwpe0009.pdf.zip
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    Bibliographic Info

    Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 9.

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    Length: 38 pages
    Date of creation: 03 Nov 1998
    Date of revision:
    Handle: RePEc:hhs:gunwpe:0009

    Contact details of provider:
    Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
    Phone: 031-773 10 00
    Web page: http://www.handels.gu.se/econ/
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    Related research

    Keywords: Trade; Income Distribution; Inequality; Human Capital;

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    References

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