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Trade Liberalization and Formal-Informal Sector Wage Differential in Nigeria

Author

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  • MATTHEW A Oluwatoyin
  • AZUH Dominic

Abstract

This study assessed the role of trade liberalization on the formal-informal sector of Nigeria. It examined whether or not the trade liberalization process have any effect on both the reduction in the wage differential between registered and non-registered (roughly formal and informal) workers and the decrease in the proportion of registered workers. The study used both secondary and primary data via the administration of questionnaires to discuss the channels through which trade liberalization could affect these two variables and put forward an empirical approach to test the existence of any correlation between them. The results from the study revealed that the fall in the wage gap between registered and non-registered workers in the manufacturing sector was affected by trade-related variables, particularly, by the import penetration ratio. However, the study did not find robust evidence that trade liberalization had a substantial effect on the decrease in the proportion of registered workers.

Suggested Citation

  • MATTHEW A Oluwatoyin & AZUH Dominic, 2013. "Trade Liberalization and Formal-Informal Sector Wage Differential in Nigeria," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(12), pages 1651-1669.
    • Handle: RePEc:asi:aeafrj:v:3:y:2013:i:12:p:1651-1669:id:1114
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