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Does tariff liberalization increase wage inequality ? - Some empirical evidence

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  • Milanovic, Branko
  • Squire, Lyn

Abstract

The objective of the paper is to answer an often asked question: If tariff rates are reduced, what will happen to wage inequality? The authors consider two types of wage inequality: between occupations (skills premium) and between industries. They use two large databases of wage inequality that have recently become available and a large data set of average tariff rates covering the period between 1980 and 2000. The authors find that tariff reduction is associated with higher inter-occupational and inter-industry inequality in poorer countries (those below the world median income) and the reverse in richer countries. However, the results for inter-occupational inequality must be treated with caution.

Suggested Citation

  • Milanovic, Branko & Squire, Lyn, 2005. "Does tariff liberalization increase wage inequality ? - Some empirical evidence," Policy Research Working Paper Series 3571, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3571
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    Cited by:

    1. Gupta Manash Ranjan & Dutta Priya Brata, 2014. "Skilled-Unskilled Wage Inequality, Growth of Skilled Labour and Development Policies," Journal of Globalization and Development, De Gruyter, vol. 5(1), pages 1-26, June.
    2. Meschi, Elena & Vivarelli, Marco, 2007. "Globalization and Income Inequality," IZA Discussion Papers 2958, Institute for the Study of Labor (IZA).
    3. Cagatay Bircan & Tilman Brück & Marc Vothknecht, 2010. "Violent conflict and inequality," Brooks World Poverty Institute Working Paper Series 12910, BWPI, The University of Manchester.
    4. Hisako Kai & Shigeyuki Hamori, 2009. "Globalization, financial depth, and inequality in Sub-Saharan Africa," Economics Bulletin, AccessEcon, vol. 29(3), pages 2025-2037.
    5. Munshi, Farzana, 2008. "Globalization and Inter-occupational Inequality in a Panel of Countries: 1983-2003," Working Papers in Economics 302, University of Gothenburg, Department of Economics.
    6. Nancy Birdsall, 2006. "Stormy Days on an Open Field: Asymmetries in the Global Economy," Working Papers 81, Center for Global Development.
    7. McCleery, Robert K. & De Paolis, Fernando, 2008. "The Washington Consensus: A post-mortem," Journal of Asian Economics, Elsevier, vol. 19(5-6), pages 438-446.
    8. Ann Harrison, 2007. "Globalization and Poverty," NBER Books, National Bureau of Economic Research, Inc, number harr06-1, January.
    9. Mazhar Yasin MUGHAL & Barassou DIAWARA, 2011. "Explaining Income Inequalities in Developing Countries:the Role of Human Capital," Working Papers 2011-2012_2, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Dec 2011.
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    11. Dario DEBOWICZ, "undated". "Real Financial Models in Argentina," EcoMod2010 259600044, EcoMod.
    12. repec:voj:journl:v:63:y:2016:i:5:p:581-601 is not listed on IDEAS
    13. Ann Harrison & Margaret McMillan, 2007. "On the links between globalization and poverty," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(1), pages 123-134, April.
    14. Jorge Rojas-Vallejos & Stephen Turnovsky, 2015. "Erratum to: The Consequences of Tariff Reduction for Economic Activity and Inequality," Open Economies Review, Springer, vol. 26(4), pages 601-631, September.
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    19. repec:asi:adprev:2017:p:1-14 is not listed on IDEAS
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    25. repec:idb:brikps:72378 is not listed on IDEAS

    More about this item

    Keywords

    Inequality; Environmental Economics&Policies; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Poverty Impact Evaluation; Economic Theory&Research;

    JEL classification:

    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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