Trade Liberalization and the Wage Skill Premium: Evidence from Indonesia

Amiti, Mary; Cameron, Lisa A.

Purchase - $8.00 CEPR Subscribers Download

Add Paper to My Library

Trade Liberalization and the Wage Skill Premium: Evidence from Indonesia

CEPR Discussion Paper No. DP8382

30 Pages Posted: 19 May 2011

See all articles by Mary Amiti

Lisa A. Cameron

University of Melbourne - Melbourne Institute: Applied Economic & 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: 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