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Trends in Tariff Reforms and in the Structure of Wages

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dc.contributor.authorGaliani, Sebastian
dc.contributor.authorPorto, Guido G.
dc.date.accessioned2012-03-30T07:34:25Z
dc.date.available2012-03-30T07:34:25Z
dc.date.issued2010
dc.description.abstractThis paper provides new evidence on the impacts of trade reforms on wages. We first introduce a model of trade that combines a noncompetitive wage-setting mechanism due to unions with a factor abundance hypothesis. The predictions of the model are then econometrically investigated using Argentine data. Instead of achieving identification by comparing industrial wages before and after one episode of trade liberalization, our strategy exploits the recent historical record of policy changes adopted by Argentina: from significant protection in the early 1970s, to the first episode of liberalization during the late 1970s, then back to a slowdown of reforms during the 1980s, and finally to the second episode of liberalization in the 1990s. These swings in trade policy represent broken trends in trade reforms that we can compare with observed trends in wages and wage inequality. We use unusual historical data sets of trends in tariffs, wages, and wage inequality to examine the structure of wages in Argentina and explore how it is affected by tariff reforms. We find that trade liberalization, ceteris paribus, reduces wages; industry tariffs reduce the industry skill premium; and conditional on the structure of tariffs at the industry level, the average tariff in the economy is positively associated with the aggregate skill premium. These findings suggest that the observed trends in wage inequality in Latin America can be reconciled with the Stolper-Samuelson predictions in a model with unions.en
dc.identifier.citationReview of Economics and Statistics
dc.identifier.issn00346535
dc.identifier.urihttps://hdl.handle.net/10986/5761
dc.language.isoEN
dc.relation.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/igo
dc.rights.holderWorld Bank
dc.subjectNeoclassical Models of Trade F110
dc.subjectTrade Policy
dc.subjectInternational Trade Organizations F130
dc.subjectTrade and Labor Market Interactions F160
dc.subjectEconomic Development: Human Resources
dc.subjectHuman Development
dc.subjectIncome Distribution
dc.subjectMigration O150
dc.subjectInternational Linkages to Development
dc.subjectRole of International Organizations O190
dc.titleTrends in Tariff Reforms and in the Structure of Wagesen
dc.title.alternativeReview of Economics and Statisticsen
dc.typeJournal Articleen
dc.typeArticle de journalfr
dc.typeArtículo de revistaes
dspace.entity.typePublication
okr.doctypeJournal Article
okr.externalcontentExternal Content
okr.identifier.externaldocumentum766
okr.journal.nbpages482-494
okr.language.supporteden
okr.peerreviewAcademic Peer Review
okr.region.countryArgentina
okr.relation.associatedurlhttp://search.ebscohost.com/login.aspx?direct=true&db=eoh&AN=1126864&site=ehost-live
okr.relation.associatedurlhttp://www.mitpressjournals.org/loi/rest
okr.volume92
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