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Trade Reform and Wage Inequality in Kenya, 1964-2000

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Author Info

  • Bigsten, Arne

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

  • Durevall, Dick

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

Abstract

This paper analyses the evolution of wage inequality in Kenya between 1964 and 2000. Our measure of wage inequality is the ratio of wages in manufacturing to wages in agriculture, which can be seen as an indicator of sectoral wage-inequality or as a proxy for skilled to unskilled wages. We find that changes in relative wages have primarily been driven by the degree of openness, while other factors such as the capital-labour ratio, educational attainment, relative labour-productivity, and the ratio between agricultural and manufacturing prices had no significant effect. We conclude that international market integration has reduced wage-inequality in Kenya.

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File URL: http://hdl.handle.net/2077/2788
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Bibliographic Info

Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 148.

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Length: 28 pages
Date of creation: 27 Oct 2004
Date of revision:
Handle: RePEc:hhs:gunwpe:0148

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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Keywords: Trade policy; globalisation; wage inequality; Kenya.;

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  1. Jorge Saba Arbache & Andy Dickerson & Francis Green, 2004. "Trade Liberalisation and Wages in Developing Countries," Economic Journal, Royal Economic Society, vol. 114(493), pages F73-F96, 02.
  2. De Maio, Lorenzo & Stewart, Frances & van der Hoeven, Rolph, 1999. "Computable General Equilibrium Models, Adjustment and the Poor in Africa," World Development, Elsevier, vol. 27(3), pages 453-470, March.
  3. Pinelopi K. Goldberg & Nina Pavcnik, 2004. "Trade, Inequality, and Poverty: What Do We Know? Evidence from Recent Trade Liberalization Episodes in Developing Countries," NBER Working Papers 10593, National Bureau of Economic Research, Inc.
  4. Wood, Adrian, 1997. "Openness and Wage Inequality in Developing Countries: The Latin American Challenge to East Asian Conventional Wisdom," World Bank Economic Review, World Bank Group, vol. 11(1), pages 33-57, January.
  5. Arne Bigsten & Peter Kimuyu & Karl Lundvall, 2004. "What to Do with the Informal Sector?," Development Policy Review, Overseas Development Institute, vol. 22(6), pages 701-715, November.
  6. Williamson, Jeffrey G, 1997. "Globalization and Inequality, Past and Present," World Bank Research Observer, World Bank Group, vol. 12(2), pages 117-35, August.
  7. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-63, July.
  8. Harrison, Ann E., 1994. "Productivity, imperfect competition and trade reform : Theory and evidence," Journal of International Economics, Elsevier, vol. 36(1-2), pages 53-73, February.
  9. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
  10. Damiano Kulundu Manda & Kunal Sen, 2004. "The labour market effects of globalization in Kenya," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(1), pages 29-43.
  11. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
  12. Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501, September.
  13. Athukorala, Prema-chandra & Rajapatirana, Sarath, 2000. "Liberalization and Industrial Transformation: Lessons from the Sri Lankan Experience," Economic Development and Cultural Change, University of Chicago Press, vol. 48(3), pages 543-72, April.
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