Trade Liberalization and the Wage Skill Premium: Evidence from Indonesia

30 Pages Posted: 19 May 2011

See all articles by Mary Amiti

Mary Amiti

Federal Reserve Bank of New York

Lisa A. Cameron

University of Melbourne - Melbourne Institute of Applied Economic and Social Research; IZA Institute of Labor Economics; J-PAL

Date Written: May 2011

Abstract

In this paper, we analyze the effect of reducing import tariffs on intermediate inputs and final goods on the wage skill premium within firms in Indonesia - a country with a high share of unskilled workers. We present a new finding that reducing input tariffs reduces the wage skill premium within firms that import their intermediate inputs. However, we do not find significant effects from reducing tariffs on final goods on the wage skill premium within firms.

Keywords: import tariffs, intermediate inputs, wage inequality

JEL Classification: F10, F12, F13, F14, F16

Suggested Citation

Amiti, Mary and Cameron, Lisa A., Trade Liberalization and the Wage Skill Premium: Evidence from Indonesia (May 2011). CEPR Discussion Paper No. DP8382. Available at SSRN: https://ssrn.com/abstract=1846284

Mary Amiti (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Lisa A. Cameron

University of Melbourne - Melbourne Institute of Applied Economic and Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org/en/webcontent/personnel/photos/index_html?key=744

J-PAL ( email )

66 bis avenue Jean Moulin
Paris, 75014
France

HOME PAGE: http://www.povertyactionlab.org/cameron

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