Openness, Inequality and Poverty: Endowments Matter

Using tariffs as a measure of openness, this paper finds consistent evidence that the conditional effects of trade liberalization on inequality are correlated with relative factor endowments. Trade liberalization, measured by changes in tariff revenues, is associated with increases in inequality in...

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Main Authors:	Gourdon, Julien, Maystre, Nicolas, de Melo, Jaime
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Equity, Justice, Inequality, and Other Normative Criteria and Measurement D630 Trade Policy International Trade Organizations F130
Online Access:	http://hdl.handle.net/10986/5795

id	okr-10986-5795
recordtype	oai_dc
spelling	okr-10986-57952021-04-23T14:02:23Z Openness, Inequality and Poverty: Endowments Matter Gourdon, Julien Maystre, Nicolas de Melo, Jaime Equity, Justice, Inequality, and Other Normative Criteria and Measurement D630 Trade Policy International Trade Organizations F130 Using tariffs as a measure of openness, this paper finds consistent evidence that the conditional effects of trade liberalization on inequality are correlated with relative factor endowments. Trade liberalization, measured by changes in tariff revenues, is associated with increases in inequality in countries well-endowed with highly skilled workers and capital or with workers that have very low education levels. Similar, although less robust, results are also obtained when decile data are used instead of the usual Gini coefficients. Taken together, the results are strongly supportive of the factor-proportions theory of trade and suggest that trade liberalization in poor countries where the share of the labor force with little education is high raises inequality. Simulation results also suggest that relatively small changes in inequality as measured by aggregate measures of inequality, like the Gini coefficient, are magnified when estimates are carried out using decile data. 2012-03-30T07:34:35Z 2012-03-30T07:34:35Z 2008 Journal Article Journal of International Trade and Economic Development 09638199 http://hdl.handle.net/10986/5795 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Equity, Justice, Inequality, and Other Normative Criteria and Measurement D630 Trade Policy International Trade Organizations F130
spellingShingle	Equity, Justice, Inequality, and Other Normative Criteria and Measurement D630 Trade Policy International Trade Organizations F130 Gourdon, Julien Maystre, Nicolas de Melo, Jaime Openness, Inequality and Poverty: Endowments Matter
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	Using tariffs as a measure of openness, this paper finds consistent evidence that the conditional effects of trade liberalization on inequality are correlated with relative factor endowments. Trade liberalization, measured by changes in tariff revenues, is associated with increases in inequality in countries well-endowed with highly skilled workers and capital or with workers that have very low education levels. Similar, although less robust, results are also obtained when decile data are used instead of the usual Gini coefficients. Taken together, the results are strongly supportive of the factor-proportions theory of trade and suggest that trade liberalization in poor countries where the share of the labor force with little education is high raises inequality. Simulation results also suggest that relatively small changes in inequality as measured by aggregate measures of inequality, like the Gini coefficient, are magnified when estimates are carried out using decile data.
format	Journal Article
author	Gourdon, Julien Maystre, Nicolas de Melo, Jaime
author_facet	Gourdon, Julien Maystre, Nicolas de Melo, Jaime
author_sort	Gourdon, Julien
title	Openness, Inequality and Poverty: Endowments Matter
title_short	Openness, Inequality and Poverty: Endowments Matter
title_full	Openness, Inequality and Poverty: Endowments Matter
title_fullStr	Openness, Inequality and Poverty: Endowments Matter
title_full_unstemmed	Openness, Inequality and Poverty: Endowments Matter
title_sort	openness, inequality and poverty: endowments matter
publishDate	2012
url	http://hdl.handle.net/10986/5795
_version_	1764396323165962240

Openness, Inequality and Poverty: Endowments Matter

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