Relative Factor Return Gaps in Labour Markets and Global Integration
We estimate the role of openness and integration in welfare generation in a cross country framework. Once controlling for institutions, openness is generally associated with increased wage inequalities across nations. However the results for trade policy are mixed. Decrease in import taxes increase wage inequality, whereas decrease in export taxes has an egalitarian effect. The results are applicable only to the larger sample of developed and developing countries. If the sample is restricted to developing countries, protection by means of export and import taxes is good for unskilled workers as higher trade taxes seem to put a downward pressure on the wage gaps between skilled and unskilled. The results highlight the bottle neck faced by both developing and developed countries in WTO talks which have not been successful as yet in terms of further decrease in trade taxes. In case this situation prevails, the paper calls for more South-South trade which would enable developing countries to decrease the relative wage gaps among their labour force.
|Date of creation:||May 2007|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC
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.:
- Alberto Chong & Mark Gradstein, 2007.
"Inequality and Institutions,"
The Review of Economics and Statistics,
MIT Press, vol. 89(3), pages 454-465, August.
- Chong, Alberto & Gradstein, Mark, 2004. "Inequality and Institutions," CEPR Discussion Papers 4739, C.E.P.R. Discussion Papers.
- Alberto E. Chong & Mark Gradstein, 2004. "Inequality and Institutions," IDB Publications (Working Papers) 5658, Inter-American Development Bank.
- Alberto Chong & Mark Gradstein, 2004. "Inequality and Institutions," Research Department Publications 4361, Inter-American Development Bank, Research Department.
- Francisco Alcalá & Antonio Ciccone, 2004.
"Trade and Productivity,"
The Quarterly Journal of Economics,
MIT Press, vol. 119(2), pages 612-645, May.
- Alcala, Francisco & Ciccone, Antonio, 2001. "Trade and Productivity," CEPR Discussion Papers 3095, C.E.P.R. Discussion Papers.
- Francisco Alcalá & Antonio Ciccone, 2001. "Trade and productivity," Economics Working Papers 580, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2002.
- Francisco Alcalá & Antonio Ciccone, 2003. "Trade and Productivity," Working Papers 12, Barcelona Graduate School of Economics.
- Rodrik, Dani & Subramanian, Arvind & Trebbi, Francesco, 2002.
"Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development,"
CEPR Discussion Papers
3643, C.E.P.R. Discussion Papers.
- Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, 06.
- Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2002. "Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development," NBER Working Papers 9305, National Bureau of Economic Research, Inc.
- Rose, Andrew K., 2004.
"Do WTO members have more liberal trade policy?,"
Journal of International Economics,
Elsevier, vol. 63(2), pages 209-235, July.
- Branko Milanovic, 2003.
"The Two Faces Of Globalization: Against Globalization As We Know It,"
Development and Comp Systems
- Milanovic, Branko, 2003. "The Two Faces of Globalization: Against Globalization as We Know It," World Development, Elsevier, vol. 31(4), pages 667-683, April.
- Edwards, Sebastian, 1998.
"Openness, Productivity and Growth: What Do We Really Know?,"
Royal Economic Society, vol. 108(447), pages 383-98, March.
- Sebastian Edwards, 1997. "Openness, Productivity and Growth: What Do We Really Know?," NBER Working Papers 5978, National Bureau of Economic Research, Inc.
- Robert E. Hall & Charles I. Jones, 1999.
"Why Do Some Countries Produce So Much More Output Per Worker Than Others?,"
The Quarterly Journal of Economics,
MIT Press, vol. 114(1), pages 83-116, February.
- Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc.
- Gordon H. Hanson & Ann Harrison, 1999. "Trade liberalization and wage inequality in Mexico," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 52(2), pages 271-288, January.
- Daron Acemoglu, 2003.
"Patterns of Skill Premia,"
Review of Economic Studies,
Oxford University Press, vol. 70(2), pages 199-230.
- Mamoon, D. & Murshed, S.M., 2005. "Are institutions more important than integration?," ISS Working Papers - General Series 19177, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
- Dollar, David & Kraay, Aart, 2003. "Institutions, trade, and growth," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 133-162, January.
- Cragg, John G. & Donald, Stephen G., 1993. "Testing Identifiability and Specification in Instrumental Variable Models," Econometric Theory, Cambridge University Press, vol. 9(02), pages 222-240, April.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:3045. 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: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.