Trade openness and wage distribution in Chile

Elisa Borghi

No 173, KITeS Working Papers from KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy

Abstract: This article analyses the effect of trade openness, implemented in Chile after 1974, on wage inequality. In the first part, this study analyses inequality and wage distribution in Chile. Workers are grouped in three categories, according to the educational level reached, in order to discriminate between skilled and unskilled labor and calculate the wage gap. The wage gap between workers with a university degree and laborers that completed the secondary school increased during the period analyzed. The wage gap between workers with secondary education completed and laborers that completed the first cycle of education decreased in the period. The second part of this article investigates the relationship between wage inequality dynamics of different groups of workers and trade openness. The empirical results suggest that trade liberalization increased wage differences between workers with a university degree and workers with a high school degree, while it did not affect the decreasing wage gap between laborers with secondary school completed and laborers with primary school completed. This paper is made up of six sections. Section I introduces the analysis. Section II describes briefly the trade liberalization process. Section III analyses the wage distribution in Chile and a measure of the wage gap between more educated and less educated workers is obtained. Section IV presents some theoretical aspects. Section V analyses the effects of the trade liberalization on the wage gap, considering different groups of workers, according to the educational level. Section VI concludes.

Keywords: Trade openness; Inequality; Skill premium (search for similar items in EconPapers)
JEL-codes: F16 J31 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2005-09, Revised 2005-09
New Economics Papers: this item is included in nep-int, nep-lab and nep-lam
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
ftp://ftp.unibocconi.it/pub/RePEc/cri/papers/WP173Borghi.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Failed to connect to FTP server ftp.unibocconi.it: No such host is known.

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:cri:cespri:wp173

Ordering information: This working paper can be ordered from
E G E A - via R. Sarfatti, 25 - 20136 Milano -Italy

Access Statistics for this paper

More papers in KITeS Working Papers from KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy via Sarfatti, 25 - 20136 Milano - Italy.
Bibliographic data for series maintained by Valerio Sterzi ( this e-mail address is bad, please contact ).