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Trade Liberalization and Wage Inequality: Empirical Evidence from Bangladesh

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Author Info
Durevall, Dick () (Department of Economics, School of Business, Economics and Law, Göteborg University)
Munshi, Farzana () (Department of Economics, School of Business, Economics and Law, Göteborg University)

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Abstract

This paper explores the relationship between trade liberalization and skilled-unskilled wage inequality in the Bangladesh cotton textile industry. A dynamic two-equation model is estimated for wages of skilled and unskilled workers over the period 1973-2002, using four different openness measures. In no case does opening up affect unskilled wages differently than skilled wages, implying that openness per se has not contributed to changes in wage inequality. Our findings also suggest that openness increased real wages for both skilled and unskilled workers.

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File URL: http://hdl.handle.net/2077/2709
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Publisher Info
Paper provided by Göteborg University, Department of Economics in its series Working Papers in Economics with number 205.

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Length: 33 pages
Date of creation: 28 Apr 2006
Date of revision:
Handle: RePEc:hhs:gunwpe:0205

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Postal: Department of Economics, School of Business, Economics and Law, Göteborg University 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: Bangladesh; cotton textile industry; openness; relative wages; trade liberalization; wage inequality;

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Find related papers by JEL classification:
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
F15 - International Economics - - Trade - - - Economic Integration
O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  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. [Downloadable!] (restricted)
  2. Koujianou Goldberg, Pinelopi & Pavcnik, Nina, 2003. "The response of the informal sector to trade liberalization," Journal of Development Economics, Elsevier, vol. 72(2), pages 463-496, December. [Downloadable!] (restricted)
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  3. Bhaskar, V & Khan, Mushtaq, 1995. "Privatization and Employment: A Study of the Jute Industry in Bangladesh," American Economic Review, American Economic Association, vol. 85(1), pages 267-73, March. [Downloadable!] (restricted)
  4. Daron Acemoglu, 2003. "Patterns of Skill Premia," Review of Economic Studies, Blackwell Publishing, vol. 70(2), pages 199-230, 04. [Downloadable!] (restricted)
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  5. Galiani, Sebastian & Sanguinetti, Pablo, 2003. "The impact of trade liberalization on wage inequality: evidence from Argentina," Journal of Development Economics, Elsevier, vol. 72(2), pages 497-513, December. [Downloadable!] (restricted)
    Other versions:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Munshi, Farzana, 2006. "Does openness reduce wage inequality in developing countries? A panel data analysis," Working Papers in Economics 241, Göteborg University, Department of Economics, revised 06 Feb 2008. [Downloadable!]
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