Does tariff liberalization increase wage inequality ? - Some empirical evidence, Vol. 1 of 1

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Does tariff liberalization increase wage inequality ? - Some empirical evidence

Author:	Milanovic, Branko; Squire, Lyn;	Collection Title:	Policy, Research working paper ; no. WPS 3571
Country:	World;	Date Stored:	2005/04/25
Document Date:	2005/04/01	Document Type:	Policy Research Working Paper
Language:	English	Region:	The World Region
Report Number:	WPS3571	SubTopics:	Environmental Economics & Policies; Economic Theory & Research; Free Trade; Inequality; Poverty Impact Evaluation
Volume No:	1 of 1

Summary: 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.


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