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Trade Reforms and Industry Wage Premium: Evidence from Argentina

Author

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  • Guillermo Falcone

    (CEDLAS-FCE-UNLP)

  • Luciana Galeano

    (CEDLAS-FCE-UNLP)

Abstract

This paper studies the impact of Argentina trade liberalization during the nineties on the industry wage premium structure. We find that accounting for unobserved timeinvariant industry characteristics is crucial. When we do not control for industry fixed effects, we find that workers in protected sectors receive lower wages. However, introducing industry fixed effects reverses the results; tariff protection creates sector specific rents that are in part translated to workers in terms of greater wages. Since Argentina’s tariff structure during this period protected relatively more sectors employing higher proportions of skilled workers, nineties trade policy may have had an adverse effect on Argentina’s income distribution

Suggested Citation

  • Guillermo Falcone & Luciana Galeano, 2017. "Trade Reforms and Industry Wage Premium: Evidence from Argentina," CEDLAS, Working Papers 0212, CEDLAS, Universidad Nacional de La Plata.
    • Handle: RePEc:dls:wpaper:0212
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    File URL: http://cedlas.econo.unlp.edu.ar/archivos_upload/doc_cedlas212.pdf
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    References listed on IDEAS

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    7. Pinelopi K. Goldberg & Nina Pavcnik, 2004. "Trade, Inequality, and Poverty: What Do We Know? Evidence from Recent Trade Liberalization Episodes in Developing Countries," NBER Working Papers 10593, National Bureau of Economic Research, Inc.
    8. Nina Pavcnik & Andreas Blom & Pinelopi Goldberg & Norbert Schady, 2004. "Trade Liberalization and Industry Wage Structure: Evidence from Brazil," The World Bank Economic Review, World Bank, vol. 18(3), pages 319-344.
    9. Attanasio, Orazio & Goldberg, Pinelopi K. & Pavcnik, Nina, 2004. "Trade reforms and wage inequality in Colombia," Journal of Development Economics, Elsevier, vol. 74(2), pages 331-366, August.
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    Cited by:

    1. Yoshimichi Murakami, 2021. "Trade liberalization and wage inequality: Evidence from Chile," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 30(3), pages 407-438, April.

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