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Trade Openness and Wage Inequality: Evidence for Malaysia

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  • Robert McNabb
  • Rusmawati Said

Abstract

This article examines the impact of trade openness on wage inequality in Malaysia during the period 1984--1997. Malaysia has operated a very open trade regime since the 1960s and has pursued aggressive import substitution and export supporting policies. This development strategy is very different to that adopted in many other emerging economies where trade liberalisation has been associated with greater wage inequality. The aim of the present study is to examine whether Malaysia's more open approach to international trade has had a similar effect on wage inequality. The results suggest, in fact, that this is not the case.

Suggested Citation

  • Robert McNabb & Rusmawati Said, 2013. "Trade Openness and Wage Inequality: Evidence for Malaysia," Journal of Development Studies, Taylor & Francis Journals, vol. 49(8), pages 1118-1132, August.
    • Handle: RePEc:taf:jdevst:v:49:y:2013:i:8:p:1118-1132
    DOI: 10.1080/00220388.2013.794263
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    References listed on IDEAS

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    1. Petia Topalova, 2010. "Factor Immobility and Regional Impacts of Trade Liberalization: Evidence on Poverty from India," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 1-41, October.
    2. Jere R. Behrman & Nancy Birdsall & Miguel Székely, 2003. "Economic Policy and Wage Differentials in Latin America," Working Papers 29, Center for Global Development.
    3. Joy Mazumdar & Myriam Quispe-Agnoli, 2002. "Trade and the skill premium in developing countries: the role of intermediate goods and some evidence from Peru," FRB Atlanta Working Paper 2002-11, Federal Reserve Bank of Atlanta.
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    Cited by:

    1. Zhang, Jingjing, 2015. "International factor mobility, elasticity of substitution in production and the skilled–unskilled wage gap," International Review of Economics & Finance, Elsevier, vol. 35(C), pages 122-129.
    2. Rusmawati Said & Kamarul Hidayah Abdul Hamid & Nursyazwani Mazlan, 2020. "How Does Immigration Affect Wages and the Unemployment Rate in Malaysia? A Computable General Equilibrium (CGE) Approach," Asian Social Science, Canadian Center of Science and Education, vol. 16(11), pages 100-100, November.
    3. Judith Liu & Mei‐Ying Lai & Zong‐Shin Liu, 2022. "Trade liberalization, domestic reforms, and income inequality: Evidence from Taiwan," Review of Development Economics, Wiley Blackwell, vol. 26(3), pages 1286-1309, August.
    4. Anwar, Sajid & Sun, Sizhong, 2015. "Taxation of labour income and the skilled–unskilled wage inequality," Economic Modelling, Elsevier, vol. 47(C), pages 18-22.
    5. Jauhari, Azmafazilah Binti & khalifah, noor, 2018. "Trade Linkages and Skill Demand: Empirical Evidence for the Malaysian Electrical and Electronics Industries," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 52(1), pages 89-103.

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