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Does tariff liberalization increase wage inequality ? - Some empirical evidence

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  • Milanovic, Branko
  • Squire, Lyn

Abstract

The objective of the paper is to answer an often asked question: If tariff rates are reduced, what will happen to wage inequality? The authors consider two types of wage inequality: between occupations (skills premium) and between industries. They use two large databases of wage inequality that have recently become available and a large data set of average tariff rates covering the period between 1980 and 2000. The authors find that tariff reduction is associated with higher inter-occupational and inter-industry inequality in poorer countries (those below the world median income) and the reverse in richer countries. However, the results for inter-occupational inequality must be treated with caution.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3571.

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Date of creation: 01 Apr 2005
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Handle: RePEc:wbk:wbrwps:3571

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Keywords: Inequality; Environmental Economics&Policies; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Poverty Impact Evaluation; Economic Theory&Research;

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Citations

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Cited by:
  1. McCleery, Robert K. & De Paolis, Fernando, 2008. "The Washington Consensus: A post-mortem," Journal of Asian Economics, Elsevier, Elsevier, vol. 19(5-6), pages 438-446.
  2. Cagatay Bircan & Tilman Brück & Marc Vothknecht, 2010. "Violent conflict and inequality," Brooks World Poverty Institute Working Paper Series, BWPI, The University of Manchester 12910, BWPI, The University of Manchester.
  3. repec:idb:brikps:72378 is not listed on IDEAS
  4. Guillermo E. Perry & Omar S. Arias & J. Humberto López & William F. Maloney & Luis Servén, 2006. "Poverty Reduction and Growth : Virtuous and Vicious Circles," World Bank Publications, The World Bank, number 6997, August.
  5. Limao, Nuno & Panagariya, Arvind, 2007. "Inequality and endogenous trade policy outcomes," Journal of International Economics, Elsevier, Elsevier, vol. 72(2), pages 292-309, July.
  6. Pranab Bardhan, 2006. "Globalization, Inequality, and Poverty," IDB Publications 9126, Inter-American Development Bank.
  7. Meschi, Elena & Vivarelli, Marco, 2009. "Trade and Income Inequality in Developing Countries," World Development, Elsevier, Elsevier, vol. 37(2), pages 287-302, February.
  8. Meschi, Elena & Vivarelli, Marco, 2007. "Globalization and Income Inequality," IZA Discussion Papers 2958, Institute for the Study of Labor (IZA).
  9. Ann Harrison, 2007. "Globalization and Poverty," NBER Books, National Bureau of Economic Research, Inc, number harr06-1.
  10. Birdsall, Nancy, 2006. "Stormy Days on an Open Field: Asymmetries in the Global Economy," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) RP2006/31, World Institute for Development Economic Research (UNU-WIDER).
  11. Hisako KAI & Shigeyuki HAMORI, 2009. "Globalization, Financial Depth, and Inequality in Sub-Saharan Africa," Discussion Papers 0912, Graduate School of Economics, Kobe University.
  12. Tausch, Arno, 2009. "Ist die Globalisierung fit für das soziale Europa?
    [Is Globalization fit for Social Europe?]
    ," MPRA Paper 14264, University Library of Munich, Germany.
  13. Spinesi, Luca, 2009. "Rent-seeking bureaucracies, inequality, and growth," Journal of Development Economics, Elsevier, Elsevier, vol. 90(2), pages 244-257, November.
  14. Munshi, Farzana, 2008. "Globalization and Inter-occupational Inequality in a Panel of Countries: 1983-2003," Working Papers in Economics, University of Gothenburg, Department of Economics 302, University of Gothenburg, Department of Economics.
  15. Hamori, Shigeyuki & Hashiguchi, Yoshihiro, 2012. "The effect of financial deepening on inequality: Some international evidence," Journal of Asian Economics, Elsevier, Elsevier, vol. 23(4), pages 353-359.
  16. Ann Harrison & Margaret McMillan, 2007. "On the links between globalization and poverty," Journal of Economic Inequality, Springer, Springer, vol. 5(1), pages 123-134, April.

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