Factor Immobility and Regional Impacts of Trade Liberalization Evidenceon Poverty From India

Petia Topalova

No 2010/218, IMF Working Papers from International Monetary Fund

Abstract: This paper uses the 1991 Indian trade liberalization to measure the impact of trade liberalization on poverty, and to examine the mechanisms underpinning this impact. Variation in sectoral composition across districts and liberalization intensity across production sectors allows a difference-in-difference approach. Rural districts, in which production sectors more exposed to liberalization were concentrated, experienced slower decline in poverty and lower consumption growth. The impact of liberalization was most pronounced among the least geographically mobile, at the bottom of the income distribution, and in Indian states where inflexible labor laws impeded factor reallocation across sectors.

Keywords: WP; trade policy; dependent variable; labor market; Poverty; Trade Liberalization; India; Tariff; poverty rate; wage premia; post liberalization indicator; production sector; trade liberalization link; D. trade liberalization; trade liberalization Evidenceon poverty; liberalization dummy; poverty-tariff link; analysis of the trade liberalization-poverty link; trade reform; Tariffs; Consumption; Europe (search for similar items in EconPapers)
Pages: 46
Date: 2010-09-01
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Citations: View citations in EconPapers (538)

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Journal Article: Factor Immobility and Regional Impacts of Trade Liberalization: Evidence on Poverty from India (2010)
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