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Evidence on Trade and Wages in the Developing World

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  • Donald J. Robbins

Abstract

This paper synthesizes nine in-depth developing country (LDC) studies on the impact of trade upon wages. It is traditionally assumed that in LDCs trade liberalization lowers relative wage dispersion, while raising wage dispersion in DCs. Evidence from cross-sectional household data for Argentina, Chile, Costa Rica, Colombia, Malaysia, Mexico, the Philippines, Chinese Taipei and Uruguay show: first, counter to one model in Leamer (1995), for countries with diversified trade, labor supply shifts generally shift wages. Second, liberalization was accompanied by rising relative wages and labor demand. And third, trade liberalization often increases the inflow of machinery, and may partly explain positive relative demand shifts accompanying trade liberalization ... Ce document est une synthèse de neuf études approfondies portant sur l’impact des échanges sur les salaires dans les pays en développement. Il est couramment admis que la libéralisation des échanges réduit la dispersion relative des salaires dans les pays en développement, alors qu’elle l’accentue dans les pays développés. Les données sur les revenus des différentes catégories de ménages disponibles pour l’Argentine, le Chili, la Costa Rica, la Colombie, la Malaisie, le Mexique, les Philippines, le Taipei chinois et l’Uruguay montrent que : tout d’abord, contrairement au modèle de Leamer (1995), dans les pays dont les échanges sont diversifiés, tout changement dans la répartition de l’offre de travail va de pair avec un ajustement des salaires ; ensuite, la libéralisation a entraîné une hausse des salaires relatifs et de la demande de main-d’oeuvre ; et enfin, la libéralisation des échanges provoque souvent une augmentation des achats de matériel, ce qui explique en partie ...

Suggested Citation

  • Donald J. Robbins, 1996. "Evidence on Trade and Wages in the Developing World," OECD Development Centre Working Papers 119, OECD Publishing.
  • Handle: RePEc:oec:devaaa:119-en
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    File URL: http://dx.doi.org/10.1787/113347174747
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    References listed on IDEAS

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    1. Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-987, December.
    2. W. Max Corden, 1988. "Debt Relief and Adjustment Incentives," IMF Staff Papers, Palgrave Macmillan, vol. 35(4), pages 628-643, December.
    3. Jeffrey D. Sachs, 1989. "Developing Country Debt and Economic Performance. The International Financial System," NBER Chapters,in: Developing Country Debt and Economic Performance, Volume 1: The International Financial System, pages -12 National Bureau of Economic Research, Inc.
    4. Alain Ize & Guillermo Ortiz, 1987. "Fiscal Rigidities, Public Debt, and Capital Flight," IMF Staff Papers, Palgrave Macmillan, vol. 34(2), pages 311-332, June.
    5. Jeffrey D. Sachs, 1989. "Introduction to "Developing Country Debt and the World Economy"," NBER Chapters,in: Developing Country Debt and the World Economy, pages 1-34 National Bureau of Economic Research, Inc.
    6. Jeffrey D. Sachs, 1989. "Developing Country Debt and the World Economy," NBER Books, National Bureau of Economic Research, Inc, number sach89-3.
    7. Philippe Callier, 1989. "Debt Relief and Adjustment Incentives in a Financially Open Economy: Comment on Corden," IMF Staff Papers, Palgrave Macmillan, vol. 36(2), pages 514-522, June.
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