Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/100766
Authors: 
Mazumdar, Joy
Quispe-Agnoli, Myriam
Year of Publication: 
2002
Series/Report no.: 
Working Paper, Federal Reserve Bank of Atlanta 2002-11
Abstract: 
The rise in income inequality in developing countries after trade liberalization has been a puzzle for trade theory, which predicts the opposite effect. The authors present a model with imported intermediate goods in which the relative wages of skilled labor can rise due to higher imports of inputs or due to skill-biased technological change. The evidence from Peru in the post-liberalization phase in the early 1990s supports the skilled-biased technological change hypothesis. The authors find that most of the decrease in the blue-collar wage share in the manufacturing industries can be explained by the increase in machinery imports that followed liberalization, suggesting that the skilled-biased technology is embodied in imported machinery.
Subjects: 
Peru
Economic development
Latin America
Trade
Document Type: 
Working Paper

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