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Trade liberalization and wage inequality in India: a mandated wage equation approach

Trade liberalization and wage inequality in India: a mandated wage equation approach Purpose – This paper aims to examine the relationship between trade liberalization and wages in India. Design/methodology/approach – This paper uses an empirical approach based on the “mandated wage equations”. Findings – The main result in the paper is that trade reforms have been associated with a rise in the relative wages of medium‐skilled workers (defined as having completed secondary schooling). The authors do not find any evidence for trade reforms to be associated with an increase or decrease in wage inequality between low and high‐skilled workers. The results are consistent with the predictions of the Stolper‐Samuelson theorem. Originality/value – The main contribution of this paper is to add to the debate on trade reforms and inequality in India by focusing on the variation in skill categories. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Indian Growth and Development Review Emerald Publishing

Trade liberalization and wage inequality in India: a mandated wage equation approach

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Publisher
Emerald Publishing
Copyright
Copyright © 2013 Emerald Group Publishing Limited. All rights reserved.
ISSN
1753-8254
DOI
10.1108/17538251311329577
Publisher site
See Article on Publisher Site

Abstract

Purpose – This paper aims to examine the relationship between trade liberalization and wages in India. Design/methodology/approach – This paper uses an empirical approach based on the “mandated wage equations”. Findings – The main result in the paper is that trade reforms have been associated with a rise in the relative wages of medium‐skilled workers (defined as having completed secondary schooling). The authors do not find any evidence for trade reforms to be associated with an increase or decrease in wage inequality between low and high‐skilled workers. The results are consistent with the predictions of the Stolper‐Samuelson theorem. Originality/value – The main contribution of this paper is to add to the debate on trade reforms and inequality in India by focusing on the variation in skill categories.

Journal

Indian Growth and Development ReviewEmerald Publishing

Published: Apr 12, 2013

Keywords: Trade liberalization; Wages; India; Trade; Pay

References