Openness and Inequality in Developing Countries: A New Look at the Evidence Report as inadecuate




Openness and Inequality in Developing Countries: A New Look at the Evidence - Download this document for free, or read online. Document in PDF available to download.

Abstract

Integration to world markets is expected to help developing countries to access prosperity. At the same time, increasing opportunities to trade are likely to affect income distribution and whether or not increasing openness to trade is accompanied by a reduction or an increase inequality is highly controversial. This paper brings new evidence on this issue in using a data set covering a large sample of developing countries and a model with improved controls for omitted variables and a new index of trade openness. Trade liberalization increases inequality in countries that relatively well-endowed in capital. Our model assumes that it might be fruitful to breakdown unskilled labor into non-educated and primary-educated as suggested by Wood 1994. The results show that trade liberalization increases inequality in highly educated abundant countries whereas it decreases inequality in primary educated abundant countries. However it increases inequality in non educated abundant countries, suggesting that this part of population does not benefit from trade openness since it is not included in export oriented sectors.



Item Type: MPRA Paper -

Institution: CERDI-

Original Title: Openness and Inequality in Developing Countries: A New Look at the Evidence-

Language: English-

Keywords: International Trade; Income Distribution; Poverty-

Subjects: F - International Economics > F1 - Trade > F11 - Neoclassical Models of TradeF - International Economics > F1 - Trade > F16 - Trade and Labor Market InteractionsD - Microeconomics > D3 - Distribution-





Author: Gourdon, Julien

Source: https://mpra.ub.uni-muenchen.de/4176/







Related documents