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Trade and Income Distribution in Developing Countries

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  • Litwin, Carol

    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

Abstract

This study examines the relationship between trade policy and income distribution on a cross-section of developing countries. The evidence suggests that the impact of openness on income distribution depends on the endowments of human capital. Basic education was found to be the key human capital variable determining export composition. Countries relatively well endowed with basic education tend to have higher shares of manufacturing exports and experience lower income inequality than countries with high shares of primary exports. These findings suggest that trade policies promoting manufactures should be based on expanding basic education to have the necessary poverty and inequality reducing effects.

Suggested Citation

  • Litwin, Carol, 1998. "Trade and Income Distribution in Developing Countries," Working Papers in Economics 9, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0009
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    References listed on IDEAS

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    Cited by:

    1. Mohsen Bahmani-Oskooee & Mehrnoosh Hasanzade, 2020. "Asymmetric Link between U.S. Tariff Policy and Income Distribution: Evidence from State Level Data," Open Economies Review, Springer, vol. 31(4), pages 821-857, September.
    2. Mr. Michael Sarel, 1997. "How Macroeconomic Factors Affect Income Distribution: The Cross-Country Evidence," IMF Working Papers 1997/152, International Monetary Fund.
    3. Khalid, Usman, 2015. "Why Trading with Dictators May Nevertheless Help the People: On the Interplay between Trade, Political Regimes and Economic Institutions," Working Papers 2015:15, Lund University, Department of Economics, revised 23 Jul 2015.
    4. Gerardo Angeles-Castro, 2007. "Factors Driving Changes in Income Distribution in Post-Reform Mexico," Studies in Economics 0706, School of Economics, University of Kent.
    5. Anneli Kaasa, 2005. "Factors Of Income Inequality And Their Influence Mechanisms: A Theoretical Overview," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 40, Faculty of Economics and Business Administration, University of Tartu (Estonia).

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    More about this item

    Keywords

    Trade; Income Distribution; Inequality; Human Capital;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General

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