Trade Liberalisation and Wage Inequality in the Bangladesh Manufacturing Sector, 1973-1994

Mohammad Hossain

Bangladesh Development Studies, 2011, vol. 34, issue 3, 31-53

Abstract: This paper assesses the impact of trade liberalisation on wage inequality in the Bangladesh manufacturing sector over the period 1973-1994 by applying alternative techniques of two-stage least squares and error correction modeling. The study also examines the hypothesis that skilled labour and physical capital are complementary with each other. The study finds that wage inequality in the Bangladesh manufacturing sector, as measured by the ratio of the non-production workers’ wage to the production workers’ wage as well as by the Theil’s wage inequality index, has widened over time. The econometric results suggest that export orientation of the Bangladesh manufacturing sector has contributed to the widening of wage inequality, while the relative demand for skilled workers had an offsetting effect. Furthermore, the findings do not support the claim that skilled labour and capital are complementary with each other.

Keywords: Trade Liberalisation; Wage Inequality; Manufacturing Sector; Manufacturing Sector; 1973-1994 (search for similar items in EconPapers)
JEL-codes: H10 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://bids.org.bd/uploads/publication/BDS/34/34-3/02_hossain.pdf Full text (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:ris:badest:0522

Access Statistics for this article

Bangladesh Development Studies is currently edited by Dr. Binayak Sen

More articles in Bangladesh Development Studies from Bangladesh Institute of Development Studies (BIDS) E-17, Agargaon, Sher-E-Bangla Nagar, Dhaka 1207. Contact information at EDIRC.
Bibliographic data for series maintained by Meftaur Rahman, Cheif Publication Officer, BIDS ().