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Trade liberalization, rent sharing and wage inequality in Tunisia, 1998-2002

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  • Monia Ghazali

Abstract

This paper attempts to empirically explore the effects of trade liberalization process in Tunisia on average real wages and wage inequality, via industry rents. For this purpose, we adopt, following Revenga (1997), a flexible model of wage setting that can accommodate both the presence of rent- sharing behavior and competitive wage determination. Results suggest that the quasi-rent reduction is one of the adjustment mechanisms used by Tunisian manufacturing firms to face trade policy changes. Two more inter-related findings deserve interest: skilled labor was more able than unskilled labor to capture rents before trade reforms. Hence, the reduction of rents appears to have reduced wage inequality between skilled and unskilled labor, over the period 1998-2002.

Suggested Citation

  • Monia Ghazali, 2011. "Trade liberalization, rent sharing and wage inequality in Tunisia, 1998-2002," International Economics, CEPII research center, issue 125, pages 5-39.
    • Handle: RePEc:cii:cepiie:2011-q1-125-1
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    File URL: http://www.sciencedirect.com/science/article/pii/S2110701713600232
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    Cited by:

    1. repec:ipg:wpaper:2014-504 is not listed on IDEAS
    2. Lanouar Charfeddine & Zouhair Mrabet, 2015. "Trade liberalization and relative employment: further evidence from Tunisia," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 5(1), pages 173-202, June.

    More about this item

    Keywords

    TRADE OPENNESS; RENT SHARING; SKILLED WORKERS; UNSKILLED WORKERS; TUNISIA; MEDITERRANEAN; NORTH AFRICA;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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