Trade Liberalization and Poverty: What Have We Learned in a Decade?

Posted: 8 Oct 2014

See all articles by L. Alan Winters

L. Alan Winters

University of Sussex; IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Antonio Martuscelli

University of Sussex - Department of Economics

Date Written: November 2014

Abstract

This article reviews key recent literature on the effects of trade liberalization on poverty in developing countries and asks whether our knowledge has changed significantly over a decade. The conclusion that liberalization generally boosts income and thus reduces poverty has not changed; some authors suggest that this finding is not true for very poor countries, but this suggestion is far from proven at present. With regard to microeconomics, recent literature again confirms that liberalization has very heterogeneous effects on poor households, depending, inter alia, on what trade policies are liberalized and how the household earns its living. Working in the export sector predicts gains, and working in the import-competing sector predicts losses, a finding that is reinforced by studies of the effects of liberalization on wages. New research has suggested several ways in which intrasectoral wage inequality is increased by trade, but this research generally does not indicate that the poor actually lose. A fairly common finding is that female workers gain from trade liberalization.

Suggested Citation

Winters, L. Alan Alan and Martuscelli, Antonio, Trade Liberalization and Poverty: What Have We Learned in a Decade? (November 2014). Annual Review of Resource Economics, Vol. 6, Issue 1, pp. 493-512, 2014, Available at SSRN: https://ssrn.com/abstract=2507245 or http://dx.doi.org/10.1146/annurev-resource-110713-105054

L. Alan Alan Winters (Contact Author)

University of Sussex ( email )

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

IZA Institute of Labor Economics ( email )

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

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Antonio Martuscelli

University of Sussex - Department of Economics ( email )

School of Social Sciences & Cultural Studies
Falmer, Brighton, BN1 9QN
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
516
PlumX Metrics