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Trade Liberalization and the Wage Skill Premium: Evidence from Indonesia

Mary Amiti () and Lisa Cameron ()

Journal of International Economics, 2012, vol. 87, issue 2, 277-287

Abstract: In this paper, we analyze the effect of reducing import tariffs on intermediate inputs and final goods on the wage skill premium within firms in Indonesia – a country with a high share of unskilled workers. We present a new finding that reducing input tariffs reduces the wage skill premium within firms that import their intermediate inputs. However, we do not find significant effects from reducing tariffs on final goods on the wage skill premium within firms.

Keywords: wage inequality; skill premium; import tariffs; intermediate inputs (search for similar items in EconPapers)
JEL-codes: F10 F12 F13 F14 (search for similar items in EconPapers)
Date: 2012
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