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Aid for Trade flows and Wage Inequality in the manufacturing sector of recipient-countries

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  • Gnangnon, Sèna Kimm

Abstract

The present article aims to contribute to the literature on the effectiveness of Aid for Trade (AfT) flows in recipient-countries by investigating the effect of these resource flows on wage inequality in the manufacturing sector of recipient-countries. The analysis has shown that AfT interventions help reduce wage inequality in the manufacturing sector of countries that liberalize their trade policies, enjoy greater trade openness, experience higher exports of labour-intensive, low-skill and high skill manufacturing products. Additionally, AfT interventions contribute to dampening the negative effect of export product concentration (for example on primary products) on wage inequality in the manufacturing sector. Finally, AfT flows reduce wage inequality in the manufacturing sector of countries that import manufacturing products (including machinery and transport equipment goods) or enjoy a greater extent of multilateral trade liberalization.

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  • Gnangnon, Sèna Kimm, 2020. "Aid for Trade flows and Wage Inequality in the manufacturing sector of recipient-countries," EconStor Preprints 213936, ZBW - Leibniz Information Centre for Economics.
  • Handle: RePEc:zbw:esprep:213936
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    Keywords

    Aid for Trade; Wage inequality in the manufacturing sector;

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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