Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/80309
Authors: 
Ackah, Charles
Morrissey, Oliver
Appleton, Simon
Year of Publication: 
2007
Series/Report no.: 
CREDIT Research Paper 07/02
Abstract: 
In this paper, we present one of the first direct microeconometric studies of the impact of trade protection on household income in Ghana. Tariff measures at the two-digit ISIC level are matched to Ghanaian household survey data for 1991/92 and 1998/99 to represent the tariff for the industry in which the household head is employed. We examine the possibility that the effect of protection on income might not be uniform across households characterized by different skill levels. Specifically, we allow the relationship between welfare and trade policy to differ for households with different levels of education. In the absence of suitable panel data, the analysis applies pseudopanel econometric techniques to our repeated cross-section data. This method has rarely been used in poverty analysis. The results suggest that higher tariffs are associated with higher incomes for households employed in the sector, so tariff reductions may reduce incomes (and increase poverty), at least in the short run, but with differing effects across skill groups. We find that this positive effect of protection is disproportionately greater for low skilled labour households, suggesting an erosion of welfare of unskilled labour households would result from trade liberalization. We conclude that contemplating trade liberalization without recognizing the complementary role of human capital investment may be a sub-optimal policy for the poor, at least in the short-run.
Subjects: 
Tariffs
Trade liberalisation
Household welfare
Pseudo-panel
Ghana
JEL: 
F14
J31
O12
O55
Document Type: 
Working Paper

Files in This Item:
File
Size
201.72 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.