International Trade and Per Capita Income Convergence: A Difference-in-Differences Analysis

24 Pages Posted: 16 Sep 2000

See all articles by Matthew J. Slaughter

Matthew J. Slaughter

Dartmouth College - Tuck School of Business; National Bureau of Economic Research (NBER)

Date Written: May 1998

Abstract

In this paper I analyze whether international trade contributes to per capita income convergence across countries. The analysis focuses on four important post-1945 multilateral trade liberalizations. To identify trade's effect on income dispersion, in each case I use a difference-in-differences' approach which compares the convergence pattern among the liberalizing countries before and after liberalization with the convergence pattern among randomly chosen control countries before and after liberalization. My main empirical result is that trade liberalization did not trigger convergence in any of the four cases. If anything, trade seems to have caused income divergence.

Suggested Citation

Slaughter, Matthew J., International Trade and Per Capita Income Convergence: A Difference-in-Differences Analysis (May 1998). NBER Working Paper No. w6557. Available at SSRN: https://ssrn.com/abstract=226290

Matthew J. Slaughter (Contact Author)

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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