Skip to main content

Trade liberalization and the inter-industry wage premia: the missingf role of productivity

Buy Article:

$55.00 plus tax (Refund Policy)

The literature concerning the effect of tariffs on the inter-industry wage premium has not addressed the role of total factor productivity (TFP) in determining both the wage premium and tariffs. This omission not only overlooks an important determinant of wage premium but also invalidates the use of the pre-reform tariff level as an instrument for the change in tariffs. Based on an analysis of Colombian data, I find that including TFP in the estimated model of the effects of tariffs on the wage premium leads to a 41% decrease in the effect of tariffs on the inter-industry wage premium relative to the model that omits TFP. More specifically, a 10 percentage point decrease in tariffs reduces the wage premium by 1.01%, whereas a 10% increase in TFP raise wage premium by 1.6%. This finding suggests the importance of using policies that boost productivity to offset the effect of tariffs on the wage premium.
No Reference information available - sign in for access.
No Citation information available - sign in for access.
No Supplementary Data.
No Data/Media
No Metrics

Keywords: Colombia; F1; F16; J3; O15; inter-industry wage premium; productivity; trade liberalization

Document Type: Research Article

Affiliations: Department of Economics, Syracuse University, Syracuse, NY, 13244, USA

Publication date: 2014-02-01

More about this publication?
  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more