Does openness reduce wage inequality in developing countries? A panel data analysis

Farzana Munshi ()

No 241, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: This paper provides panel data evidence on trade liberalization and wage inequality in Bangladesh. Using several standard econometric models, wage equations for skilled and unskilled workers in the formal manufacturing sector are estimated for the 1975-2002 period. The results, particularly the estimates from a dynamic fixed effects model, provide some weak evidence that openness contributes to a reduction in wage inequality between skilled and unskilled workers. The results also indicate that real wages of both unskilled and skilled workers increased during the period.

Keywords: Bangladesh; openness; wage inequality; panel data; panel unit root; dynamic model (search for similar items in EconPapers)
JEL-codes: C33 F14 F15 O15 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2006-12-14, Revised 2008-02-06
New Economics Papers: this item is included in nep-dev and nep-lab
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Citations: View citations in EconPapers (3)

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