The Impact of Trade Liberalisation on Wage Inequality: Case of Pakistan

Zara Salman and Mariam Javed
Additional contact information
Zara Salman: Department of Economics, School of Humanities, Social Sciences and Law, Lahore University of Management Sciences, Lahore
Mariam Javed: Department of Economics, School of Humanities, Social Sciences and Law, Lahore University of Management Sciences, Lahore

The Pakistan Development Review, 2011, vol. 50, issue 4, 575-595

Abstract: This paper examines whether trade liberalisation played a role in shaping the wage structure of Pakistan in the late 1990s and early 2000. It uses manufacturing workers data from LFS supplemented by external information to analyse the impact of trade liberalisation. In general, the results show that trade liberalisation, measured through import penetration ratio, export penetration ratio and relative prices of each industry, not only impacted wages but also increased wage inequality across skill levels from 1996-97 to 2005-06. The econometrics analysis confirms that increase in import penetration raises skilled premium while simultaneously reducing unskilled premium; a result in contention with the findings of the Stolper-Sameulson Theorem.

Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.pide.org.pk/pdf/PDR/2011/Volume4/575-595.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pid:journl:v:50:y:2011:i:4:p:575-595

Access Statistics for this article

More articles in The Pakistan Development Review from Pakistan Institute of Development Economics Contact information at EDIRC.
Bibliographic data for series maintained by Khurram Iqbal ().