The effect of trade liberalization on wage distribution in Taiwan:1981-2012
Date Issued
2014
Date
2014
Author(s)
Kao, Hung-Wen
Abstract
Abstract
As a small open economy, external trade has great influence on the economic prosperity of Taiwan. Whenever the recession or real wage stagnation occurs, the government often adopts strategies aiming at stimulating export. Although discussions about expanding wage inequality can be easily found on media recent years, we actually know little about the wage inequality trend of Taiwan as well as the distribution effect of trade which might trigger wage inequality. The purpose of this article is to provide a detail description about the wage inequality trend of Taiwan, and explore the role of trade on wage inequality.
Based on the microdata from 1978 to 2012, the wage inequality trend can be divided as follows: In 1980s, the wage gap between middle and lower class widened rapidly. After the removal of import and exchange regulation in 1987, wage gap began to shrink in manufacturing. Since 2000, wage distribution is continuously skewed to the right, and the wage gap between middle and lower class declines. During the entire period, trade (especially import) is clarified as the most important factor affecting wage inequality only to 1987-2002.
By market integration, even if import deregulation had adverse effect on the downstream plants of low-tech manufacturing such as textiles and leather products, it would be beneficial for the upstream plants of low-tech manufacturing. After the offshore migration of downstream plants, the upstream material purchase would gain, leading to export growth of upstream plants and narrowing wage gap. Through comparison of regressions using different subgroups sample, it can be verified that market integration is the most persuasive explanation to explain the wage gap reduction occurred in 1987-2002.
Subjects
薪資分配
薪資不均
進口競爭
市場整合
技術溢酬
SDGs
Type
thesis
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