Hashim, Danish and Banga, Rashmi (2009): Impact of Trade on Labour Productivity and Wage Inequality in India.
Download (246Kb) | Preview
Abstract: The paper empirically estimates the impact of trade on labour productivity and wage inequality between skilled (white collar) and unskilled (blue collar) labour in Indian manufacturing. Analysis is undertaken using dynamic panel data estimations (GMM) for 58 manufacturing industries for the period 1998-99 to 2004-05. The results show that export intensity of industries has positively impacted productivity of unskilled labour while import competition has led to higher productivity of both skilled and unskilled labour. However, trade has led to increase in wage inequalities between skilled and unskilled labour implying that it has increased the wages of skilled labour more than the unskilled labour.
|Item Type:||MPRA Paper|
|Original Title:||Impact of Trade on Labour Productivity and Wage Inequality in India|
|Keywords:||Trade and Wage Inequality; labour productivity; wage inequality between skilled and unskilled labour; Wage Inequality; Indian manufacturing and labour productivity; Indian manufacturing and wage inequality; Labour productivity of unskilled labour|
|Subjects:||F - International Economics > F1 - Trade > F16 - Trade and Labor Market Interactions
F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms; International Business
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials
|Depositing User:||RASHMI BANGA|
|Date Deposited:||05. Dec 2011 16:30|
|Last Modified:||13. Feb 2013 11:02|
Alcala, F and A. Ciccone (2001). “Trade and Productivity”, CEPR Discussion paper 3095.
Arellano, M. and Bond, S. (1991). ‘Some tests of specification for panel data: Monte Carlo evidence and application to employment equations’, Review of Economics Studies, Vol. 58, pp. 277–297.
Banga, R (2005a). “Liberalisation and wage inequality in India, working paper No. 156, ICRIER working paper series, New Delhi.
Banga, R (2005b). “Impact of liberalisation on wages and employment in Indian manufacturing industries”, working paper No. 153, ICRIER working paper series, New Delhi.
Bernard, A. B, J. Bradford Jensen and Peter K. Scholt, (2006). “Trade cost, Firms and Productivity, Journal of Monetary Economics, 53
Bhagwati, Jagdish and Vivek H. Dehejia (1994) “Freer Trade and Wages of the Unskilled: Is Marx Striking Again?”. In J. Bhagwati and M. Kosters, eds, Trade and Wages: Leveling Wages Down? Washington, DC: AEI Press.
Bhalotra, S (2002). “The impact of economic liberalisation on employment and wages in India”, International policy group, ILO, Geneva.
Bloch. H and J. McDonald (1999). “The Spillover Effects of Industrial Action on Firm Profitability”, Review of Industrial Organization, September, 15(2).
Brainard, S. L (1997). “ An Empirical Assessment of the Proximity-concentration Trade-off between Multinational Sales and Ttrade”, American Economic Review, Vol.87.
Doyle, E and I. M Zarzoso (2005).”The Productivity, Trade and Institutional Quality Nexus: A panel Analysis, www.aeaweb. Org/annual_mtg_papers.
Douglas,A. I (2003). Free Trade under Fire, Princeton University Press.
Durevall, P and F. Munshi (2006). “Trade liberalisation and wage inequality: Empirical evidence from Bangladesh, Department of Economics, School of Business and Law, Gutenberg University, Sweden.
Dutt, P (2003). “Labour market outcomes and trade reforms, The case of India”, in Hasan, R and D. Mitra, (ed.), The impact of trade on labour: Issues, perspectives and experience from developing Asia, Haarlem: North-Holland/Elsevier Science B.V.
Dutta, V. P (2004). “Trade protection and inter-industry wages in India”, PRUS working paper No. 27, University of Sussex, Sussex.
Edwards, A.C and S. Edwards (1994). “Labour market distortions and structural adjustment in developing countries”, in H. Susan, et al , (ed.), Labour market in an era of Adjustment, The World Bank, Washington D.C.
Faciane, K. A (2005). “Analyzing the Effect of transitory Components on Prices on Volatility Patterns with Feedback Traders”,Economics Working Paper Archive at WUSTI.
Feenstra, C.Robert and Gordon H. Hanson (1995), ‘Foreign Direct Investment and Relative wages: Evidence from Mexico’s Maquiladoras’, NBER WP 5122.
Frankel, J and David Romer (1999). “Does Trade Cause Growth”? American Economic Review, 89 (3).
Freeman, R. B and L. Katz (1993). Difference and changes in wage structure, University of Chicago press, Chicago.
Gera, S and P. Masse (1996). “Employment performance in the knowledge based economy”, Industry Canada, working paper No. 14, Canada.
Ghose, D. K (2000). “Trade liberalisation and manufacturing employment”, ILO Employment paper No. 2000/3, Geneva.
Hasan, R (2001). “The impact of trade and labour market regulations on employment and wages: Evidences from developing countries”, East-West Center working papers, August, No. 32.
Hasan, R, D. Mitra and. V. Ramaswamy (2007). “Trade reforms, labour regulations and labour-demand elasticities: Empirical evidence from India”, The Review of Economic and Statistics, August, Vol. 89, NO. 3.
Head. K and J. Ries (2001). “Overseas Investment and Firm Exports, Review of International Economics, Vol. 9.
Hill, W. L (2003). International Business, TMH Publishing Ltd., New Delhi.
Hirway. I (2008). Trade and gender inequalities in labour market: Case of textiles and garment industry in India, paper presented at International seminar on moving towards gender sensitization of trade policy, organized by UNCTAD, New Delhi, 25-27, February.
Katz, L. F., and K. M. Murphy (1992), ‘Changes in Relative Wages, 1963-1987: Supply and Demand Factors’, Quarterly Journal of Economics, 107, 35—78.
Krishna. P and D. Mitra (1998). “Trade liberalisation, market discipline and productivity growth: New evidence from India, Journal of development economics, 56(2).
Kmenta J. (1967), ‘On Estimation of the CES Production Function’, International Economic Review, 8(2), 180-189.
Krugman, P and L. Robert (1994). “Trade, jobs and wages,” Scientific American, April.
Keesing, D.B !966). “Labour Skills and Comparative Advantage”, American Economic Review, Vol. 56.
Marjit, S and R. Acharya (2003). “International trade, wage inequality and developing country: A general equilibrium approach, Heidelberg, Physica/Springer Verlag.
Markusen, James R. and Anthony J. Venables (1997), ‘The Role of Multinational Firms in the wage-gap Debate’, Review of International Economics, Vol. 5, pp. 435- 451.
Menon, N and Y V Rodgers (2007), “Trade competition, market power and gender wage differentials in India’s manufacturing sector, www.aeaweb.org/annual-mtg_pp.
OECD, (1994). “Jobs study: Evidence and explanations” Chapter – 3, Paris.
Robbins, D (1996). “HOS hits facts: Facts win; Evidence on trade and wages in the developing world”, Development discussion paper No. 557, HIID.
Topalava, P (2004). “Trade liberalisation and firm productivity: The case of India, IMF working paper 04/28.
Wood, A (1997). “Openness and wage inequality in developing countries: The Latin American challenge to East Asian conventional wisdom”, The World Bank Economic Review, Vol.11, No. 1.
Zalkilwhal, O (2000). “Trade and wages: A Non-Stolper-Samuelson explanation: Evidence from Canada”, Phd. Dissertation, Department of Economics, Carleton university, Attowa.