Effect of Trade Liberalisation on Wage Inequality in Indonesia
Abstract
This study attempts to find out the influence of trade liberalisation on wage inequality in Indonesia. A two-stage estimation approach is used. Using the national labour force survey dataset, the study estimates industry wage premium and industry-specific skill premium in the first stage conditional on individual worker characteristics. In the second stage, the study regresses industry wage premium and industry-specific skill premium on tariff as a measure of trade liberalisation, respectively. It is concluded that trade liberalisation significantly contributes to increasing wage inequality. This contribution occurred through changes in industry wage premium but not industry-specific skill premium.
Published
2018-11-09
How to Cite
WATEKHI, Watekhi et al.
Effect of Trade Liberalisation on Wage Inequality in Indonesia.
Malaysian Journal of Economic Studies, [S.l.], v. 55, n. 2, p. 209-229, nov. 2018.
ISSN 1511-4554. Available at: <https://mjes.um.edu.my/article/view/14565>. Date accessed: 16 feb. 2019.
doi: https://doi.org/10.22452/MJES.vol55no2.4.
Section
Articles