Trade liberalisation and manufacturing wage premiums: Evidence from Thailand

Abstract

This paper investigates trade related industrial wage premiums. The procedure involves (1) estimating industrial wage premiums and (2) linking those estimated wage premiums to trade related variables. Results reveal that (1) in addition to workers' characteristics, industry characteristics where workers are employed were important in determining the wages for workers, (2) falling output tariffs resulted in increased wage premiums, and (3) an increase in intermediate imports exerted a strong positive influence on wage premiums. Linked employer and employee micro data may provide further insights which are currently not available.

Effect of Trade Liberalisation on Wage Inequality in Indonesia

“…Many people query the feasible advantages of trade liberalisation; whether improvements in efficiency and wellbeing are greater than the possible expenses of expanding dissimilarity, and 'down racing' in wages. Several researches suggested utilising labour market policies, such as minimum wages and government social protection programs to balance the possible rise in dissimilarities connected to trade liberalisation (Goldberg & Pavcnik, 2007;Jayanthakumaran, Sangkaew, & O'Brien, 2013;Kumar & Mishra, 2008;Mehta & Hasan, 2012).…”

Trade Liberalization and Firm Performance: The Case of Thailand

“…Studies of FTAs and Thai firm performance are limited. Jayanthakumaran, Sangkaew, and O'Brien (2013) examined the impact of Thailand's trade liberalization on wage premiums from 1999 to 2007. They use labor surveys to estimate wage premiums and industrial surveys to estimate industry characteristics, trade liberalization and exposure.…”

Impact of Trade Liberalization on the Industry Wages in Pakistan (1995 – 2015)

“…However, some studies [Kumar and Mishra (2007), Galiani and Porto (2010) and Amiti and Cameron (2012)] find that trade reforms resulted in a reduction in the skilledunskilled wage-gap within the manufacturing industries in India, Argentina and Indonesia, respectively. In case of Thailand, Jayanthakumaran et al (2013) observe increase in wage premiums due to a fall in tariffs on final goods, while a decline in tariffs of intermediate goods exerts a stronger positive effect on wage premiums.…”