IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Trade Liberalisation Does Not Always Raise Wage Premia: Evidence from Ugandan Districts

Author Info

Listed author(s):
  • Massimiliano Calì

Abstract

The process of economic integration over the past two decades has been accompanied by an expanding income wedge between skilled and unskilled workers in many developing countries. This was also the case for Ugandan wage employees during the 1990s, which was a period of abrupt trade opening and market reforms. This is a surprising result for an unskilled labour abundant country like Uganda in light of a standard Heckscher-Ohlin (H-O) framework. But was the trade opening responsible for the increase in wage premia? By using a novel district-level analysis, I find that in fact increased trade reduced the returns to schooling in line with the H-O predictions. On the other hand, the intensification of domestic trade across districts during the period was associated with higher returns in those districts relatively endowed with skilled employees. This effect appears to be responsible for at least some of the rising returns to schooling among wage employees in Uganda.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.spatialeconomics.ac.uk/textonly/SERC/publications/download/sercdp0114.pdf
Download Restriction: no

Paper provided by Spatial Economics Research Centre, LSE in its series SERC Discussion Papers with number 0114.

as
in new window

Length:
Date of creation: Jun 2012
Handle: RePEc:cep:sercdp:0114
Contact details of provider: Web page: http://www.spatialeconomics.ac.uk/SERC/publications/default.asp

Keywords: Returns to education; wage inequality; Uganda; trade; market reforms;

Other versions of this item:

Find related papers by JEL classification:
  • F10 - International Economics - - Trade - - - General
  • F14 - International Economics - - Trade - - - Empirical Studies of Trade
  • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
  • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
  • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

This paper has been announced in the following NEP Reports:

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.:

as
in new window


  1. Mattoo, Aaditya & Neagu, Ileana Cristina & Özden, Çaglar, 2008. "Brain waste? Educated immigrants in the US labor market," Journal of Development Economics, Elsevier, vol. 87(2), pages 255-269, October.
  2. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
  3. Amiti, Mary & Cameron, Lisa, 2012. "Trade Liberalization and the Wage Skill Premium: Evidence from Indonesia," Journal of International Economics, Elsevier, vol. 87(2), pages 277-287.
  4. Guy Michaels, 2008. "The Effect of Trade on the Demand for Skill: Evidence from the Interstate Highway System," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 683-701, November.
  5. Simon Baptist & Francis Teal, 2008. "Why do South Korean firms produce so much more output per worker than Ghanaian ones?," CSAE Working Paper Series 2008-10, Centre for the Study of African Economies, University of Oxford.
  6. Ravi Kanbur, 2005. "Spatial Inequality and Development: Overview of UNU-WIDER Project," Working Papers id:215, eSocialSciences.
  7. Pinelopi Koujianou Goldberg & Nina Pavcnik, 2007. "Distributional Effects of Globalization in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 45(1), pages 39-82, March.
  8. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
  9. Demombynes, Gabriel & Elbers, Chris & Lanjouw, Jenny & Lanjouw, Peter & Mistiaen, Johan & Ozler, Berk, 2002. "Producing an Improved Geographic Profile of Poverty: Methodology and Evidence from Three Developing Countries," WIDER Working Paper Series 039, World Institute for Development Economic Research (UNU-WIDER).
  10. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
  11. Yang, Dennis Tao, 2005. "Determinants of schooling returns during transition: Evidence from Chinese cities," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 244-264, June.
  12. Leonardo Iacovone & BeataS. Javorcik, 2010. "Multi-Product Exporters: Product Churning, Uncertainty and Export Discoveries," Economic Journal, Royal Economic Society, vol. 120(544), pages 481-499, 05.
  13. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2004. "Does Local Financial Development Matter?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(3), pages 929-969.
  14. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
  15. Kanbur, Ravi & Venables, Anthony J. (ed.), 2005. "Spatial Inequality and Development," OUP Catalogue, Oxford University Press, number 9780199278633.
  16. Måns Söderbom & Francis Teal & Anthony Wambugu & Godius Kahyarara, 2006. "The Dynamics of Returns to Education in Kenyan and Tanzanian Manufacturing," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(3), pages 261-288, 06.
  17. Orley Ashenfelter & David J. Zimmerman, 1997. "Estimates Of The Returns To Schooling From Sibling Data: Fathers, Sons, And Brothers," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 1-9, February.
  18. Meschi, Elena & Vivarelli, Marco, 2009. "Trade and Income Inequality in Developing Countries," World Development, Elsevier, vol. 37(2), pages 287-302, February.
  19. Eric A. Verhoogen, 2008. "Trade, Quality Upgrading, and Wage Inequality in the Mexican Manufacturing Sector," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 489-530.
  20. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters,in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  21. Attanasio, Orazio & Goldberg, Pinelopi K. & Pavcnik, Nina, 2004. "Trade reforms and wage inequality in Colombia," Journal of Development Economics, Elsevier, vol. 74(2), pages 331-366, August.
  22. Robert E. Lucas, Jr., 2004. "Life Earnings and Rural-Urban Migration," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages 29-59, February.
  23. Francis Teal & Simon Baptist, 2008. "Why do South Korean firms produce so much more output per worker than Ghanaian ones?," Economics Series Working Papers WPS/2008-10, University of Oxford, Department of Economics.
  24. Ravi Kanbur & Tony Venables, 2005. "Introduction: Spatial inequality and development," Journal of Economic Geography, Oxford University Press, vol. 5(1), pages 1-2, January.
  25. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
  26. Flabbi, Luca & Paternostro, Stefano & Tiongson, Erwin R., 2008. "Returns to education in the economic transition: A systematic assessment using comparable data," Economics of Education Review, Elsevier, vol. 27(6), pages 724-740, December.
  27. Nicita, Alessandro, 2009. "The price effect of tariff liberalization: Measuring the impact on household welfare," Journal of Development Economics, Elsevier, vol. 89(1), pages 19-27, May.
  28. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
  29. Glaeser, Edward L & Mare, David C, 2001. "Cities and Skills," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 316-342, April.
  30. Karl Taylor, 2006. "UK Wage Inequality: An Industry and Regional Perspective," LABOUR, CEIS, vol. 20(1), pages 91-124, 03.
  31. Anderson, Edward, 2005. "Openness and inequality in developing countries: A review of theory and recent evidence," World Development, Elsevier, vol. 33(7), pages 1045-1063, July.
  32. Gilles Duranton & Vassilis Monastiriotis, 2002. "Mind the Gaps: The Evolution of Regional Earnings Inequalities in the U.K., 1982-1997," Journal of Regional Science, Wiley Blackwell, vol. 42(2), pages 219-256.
  33. Pramila Krishnan & Tesfaye Gebre Selassie & Stefan Dercon, 1998. "The urban labour market during structural adjustment: Ethiopia 1990-1997," CSAE Working Paper Series 1998-09, Centre for the Study of African Economies, University of Oxford.
Full references (including those not matched with items on IDEAS)

The CitEc project has not yet found citations to this item.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Access and download statistics

When requesting a correction, please mention this item's handle: RePEc:cep:sercdp:0114. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.