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Does openness reduce wage inequality in developing countries? A panel data analysis

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  • Munshi, Farzana

    () (Department of Economics, School of Business, Economics and Law, Göteborg University)

Abstract

This paper provides panel data evidence on trade liberalization and wage inequality in Bangladesh. Using several standard econometric models, wage equations for skilled and unskilled workers in the formal manufacturing sector are estimated for the 1975-2002 period. The results, particularly the estimates from a dynamic fixed effects model, provide some weak evidence that openness contributes to a reduction in wage inequality between skilled and unskilled workers. The results also indicate that real wages of both unskilled and skilled workers increased during the period.

Suggested Citation

  • Munshi, Farzana, 2006. "Does openness reduce wage inequality in developing countries? A panel data analysis," Working Papers in Economics 241, University of Gothenburg, Department of Economics, revised 06 Feb 2008.
  • Handle: RePEc:hhs:gunwpe:0241
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    File URL: http://hdl.handle.net/2077/2665
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    References listed on IDEAS

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    Cited by:

    1. Ucal, Meltem & Bilgin, Mehmet Huseyin, 2009. "Income Inequality and FDI in Turkey: FM-OLS (Phillips-Hansen) Estimation and ARDL Approach to Cointegration," MPRA Paper 48765, University Library of Munich, Germany.
    2. Meltem Ucal & Alfred Albert Haug & Mehmet Hüseyin Bilgin, 2016. "Income inequality and FDI: evidence with Turkish data," Applied Economics, Taylor & Francis Journals, vol. 48(11), pages 1030-1045, March.

    More about this item

    Keywords

    Bangladesh; openness; wage inequality; panel data; panel unit root; dynamic model;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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