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Title: Trade Liberalization and the Wage Skill Premium: Evidence from Indonesia

Author(s): Mary Amiti and Lisa Cameron

Publication Date: May 2011

Keyword(s): import tariffs, intermediate inputs and wage inequality

Programme Area(s): International Trade and Regional Economics

Abstract: In this paper, we analyze the effect of reducing import tariffs on intermediate inputs and final goods on the wage skill premium within firms in Indonesia ? a country with a high share of unskilled workers. We present a new finding that reducing input tariffs reduces the wage skill premium within firms that import their intermediate inputs. However, we do not find significant effects from reducing tariffs on final goods on the wage skill premium within firms.

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Bibliographic Reference

Amiti, M and Cameron, L. 2011. 'Trade Liberalization and the Wage Skill Premium: Evidence from Indonesia'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=8382