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Trade liberalisation does not always raise wage premia: evidence from Ugandan districts

Cali, Massimiliano (2012) Trade liberalisation does not always raise wage premia: evidence from Ugandan districts. SERC Discussion Papers (SERCDP0114). The London School of Economics and Political Science ,SERC Discussion Paper, London, UK.

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Abstract

The process of economic integration over the past two decades has been accompanied by an expanding income wedge between skilled and unskilled workers in many developing countries. This was also the case for Ugandan wage employees during the 1990s, which was a period of abrupt trade opening and market reforms. This is a surprising result for an unskilled labour abundant country like Uganda in light of a standard Heckscher-Ohlin (H-O) framework. But was the trade opening responsible for the increase in wage premia? By using a novel district-level analysis, I find that in fact increased trade reduced the returns to schooling in line with the H-O predictions. On the other hand, the intensification of domestic trade across districts during the period was associated with higher returns in those districts relatively endowed with skilled employees. This effect appears to be responsible for at least some of the rising returns to schooling among wage employees in Uganda.

Item Type: Monograph (Discussion Paper)
Official URL: http://rlab.lse.ac.uk/_new/publications/abstract.a...
Additional Information: © 2012 The Author
Divisions: Spatial Economics Research Centre
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HC Economic History and Conditions
Sets: Research centres and groups > Spatial Economics Research Centre
Date Deposited: 27 Aug 2014 13:04
Last Modified: 28 Sep 2020 23:05
Funders: Economic and Social Research Council, Department for Business, Innovation and Skills (BIS), Welsh Government
URI: http://eprints.lse.ac.uk/id/eprint/59247

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