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Is Trade Liberalisation Pro‐Poor in Pakistan? Evidence from Large‐Scale Manufacturing

Atif Khan Jadoon and Ambreen Sarwar

Australian Economic Review, 2020, vol. 53, issue 3, 360-394

Abstract: This article aims to analyse the impact of industry‐level trade liberalisation (measured through industry‐specific tariff rates) on poverty in Pakistan. Combining data for tariff rates with the Labour Force Survey of Pakistan, we use quantile regression analysis to estimate the impact of changes in tariff rates on workers’ wages (associated with the manufacturing sector of Pakistan) that are at different points of the income distribution. Our findings meaningfully signal that trade liberalisation helps to reduce poverty in the economy. Based on these results, this study provides policy recommendations to reap maximum benefits from trade liberalisation.

Date: 2020
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