American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Factor Immobility and Regional Impacts of Trade Liberalization: Evidence on Poverty from India
American Economic Journal: Applied Economics
vol. 2,
no. 4, October 2010
(pp. 1–41)
(Complimentary)
Abstract
This paper uses the 1991 Indian trade liberalization to measure the impact of trade liberalization on poverty, and to examine the mechanisms underpinning this impact. Variation in sectoral composition across districts and liberalization intensity across production sectors allows a difference-in-difference approach. Rural districts, in which production sectors more exposed to liberalization were concentrated, experienced slower decline in poverty and lower consumption growth. The impact of liberalization was most pronounced among the least geographically mobile at the bottom of the income distribution, and in Indian states where inflexible labor laws impeded factor reallocation across sectors. (JEL F13, I32, O15, O18, O19, O24)Citation
Topalova, Petia. 2010. "Factor Immobility and Regional Impacts of Trade Liberalization: Evidence on Poverty from India." American Economic Journal: Applied Economics, 2 (4): 1–41. DOI: 10.1257/app.2.4.1Additional Materials
JEL Classification
- F13 Trade Policy; International Trade Organizations
- I32 Measurement and Analysis of Poverty
- O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O18 Economic Development: Regional, Urban, and Rural Analyses; Transportation
- O19 International Linkages to Development; Role of International Organizations
- O24 Development Planning and Policy: Trade Policy; Factor Movement; Foreign Exchange Policy
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