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Structural transformation and inequality: Does trade openness matter?

Wannaphong Durongkaveroj ()

Departmental Working Papers from The Australian National University, Arndt-Corden Department of Economics

Abstract: The purpose of this paper is to examine how trade openness impacts on income inequality in the process of economic transformation. The paper begins with an analytical framework drawing on Kuznets (1955) to set the stage for the empirical analysis. It then examines the role of trade openness in the structural transformation-income inequality nexus using a multicountry panel data analysis covering 48 countries for the period from 1960 to 2010. The results suggest that an increase in the share of employment in manufacturing reduces inequality, irrespective of the stages of structural transformation, and the impact on income inequality is larger for countries with higher degree of trade openness. The findings withstand controlling for the other relevant explanatory variables and the use of different estimators.

Keywords: structural change; inequality; trade openness; inequality (search for similar items in EconPapers)
JEL-codes: O10 O24 O53 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2021
New Economics Papers: this item is included in nep-his and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:pas:papers:2021-10

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