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The impact of trade liberalizationon wage inequality:Evidence from Argentina

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  • Pabo Sanguinetti

    ()

  • Sebastian Galiani

    ()

Abstract

Wage inequality in Argentina greatly increased during the nineties. During this period, a rapid and deep process of trade liberalization was implemented. In this paper we study whether trade liberalization played any role in shaping the Argentine wage structure during the nineties. Specifically, we test whether those sectors where import penetration deepened are also the sectors where, ceteris paribus, a higher increase in wage inequality is observed. Even though we find some evidence that supports this hypothesis, as has been found for some developed economies, trade deepening can only explain a relatively small proportion of the observed rise in wage inequality.

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Bibliographic Info

Paper provided by Universidad Torcuato Di Tella in its series Department of Economics Working Papers with number 011.

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Length: 23 pages
Date of creation: Apr 2003
Date of revision:
Handle: RePEc:udt:wpecon:011

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Web page: http://www.utdt.edu/ver_contenido.php?id_contenido=439&id_item_menu=568
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  1. Sebasti=E1n Galiani & Hugo A. Hopenhayn, 2001. "Duration and Risk of Unemployment in Argentina," Labor and Demography 0012002, EconWPA.
  2. Adrian Wood, 1995. "How Trade Hurt Unskilled Workers," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 57-80, Summer.
  3. Robert Feenstra, 2003. "Integration Of Trade And Disintegration Of Production In The Global Economy," Working Papers 986, University of California, Davis, Department of Economics.
  4. Machin, Steve, 1994. "Changes in the Relative Demand for Skills in the UK Labour Market," CEPR Discussion Papers 952, C.E.P.R. Discussion Papers.
  5. Bound, John & Johnson, George, 1992. "Changes in the Structure of Wages in the 1980's: An Evaluation of Alternative Explanations," American Economic Review, American Economic Association, vol. 82(3), pages 371-92, June.
  6. Machin, Stephen, 1996. "Wage Inequality in the UK," Oxford Review of Economic Policy, Oxford University Press, vol. 12(1), pages 47-64, Spring.
  7. Edward E. Leamer, 1994. "Trade, Wages and Revolving Door Ideas," NBER Working Papers 4716, National Bureau of Economic Research, Inc.
  8. Mary E. Lovely & J. David Richardson, 2000. "Trade Flows and Wage Premiums: Does Who or What Matter?," NBER Chapters, in: The Impact of International Trade on Wages, pages 309-348 National Bureau of Economic Research, Inc.
  9. Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, vol. 32(3), pages 385-397, August.
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