The objective of the paper is to answer an often-asked question: if tariff rates are reduced, what will happen to wage inequality? We consider two types of wage inequality: between occupations (skills premium) and between industries. We use two large databases of wage inequality that have become...

This paper offers a medium-term perspective for analysing the trade openness - inequality relationship in Latin America. We present three contributions. The first is that we assemble a database on income distribution indicators systematically estimated from household surveys with emphasis on...

We develop a two-country, two-sector model of trade where the only difference between the two countries is their distribution of human capital endowments. We show that even if the two countries have identical aggregate human capital endowments the pattern of trade depends on the properties of...

Trade flows among countries have increased dramatically during the last globalization episode creating new winners and losers between and within countries. This paper revisits the contested topic of the impact of globalization on within-country inequality in Latin America from a historical...

The paper analyzes the labor market effects of globalization when foreign market entry is costly and risky. With flexible labor markets, a fall in foreign market entry cost tends to generate more income inequality. By contrast, when workers cannot easily switch industries and wages are...

Openness is not necessarily good for the poor. Reducing trade protection has not brought growth to today’s poorest countries, and open capital markets have not been good for the poorest households in emerging market economies. In this paper I present evidence on these two points. First,...

This paper focuses on the role of "institutions" in the fight against poverty and inequality. Our view of institutions encompasses formal rules designed by polity (including those in the legal and economics sphere such as rules of property rights, contracts and liabilities) as well as informal...

The endogenous growth literature has explored the transition from a Malthusian world where real wages, living standards and labor productivity are all linked to factor endowments, to one where (endogenous) productivity change embedded in modern industrial growth breaks that link. Recently,...

This paper surveys the literature on the implications of trade liberalisation for intra-national economic geographies. Three results stand out. First, neither urban systems models nor new economic geography models imply a robust prediction on the impact of trade openness on spatial...

The endogenous growth literature raises the possibility that countries may grow without bound in terms of per capita income, and that they may do so at different rates. This possibility also exists in neoclassical growth models with diverging populations - populations that grow at different...