Trade Policy and the Household Distribution of Income
June 2004
Research Paper
| Related Files |
|---|
View PDF Version
(2004-0512.pdf, 0.2MB) |
We explore the relationship between import protection and the household distribution of income. We first develop a general-equilibrium mapping from tariffs to household inequality measures. This also yields predictions for linkages between tariffs, development level, and observed household inequality. Working with a new dataset, we then examine crosscountry variation in inequality with respect to import protection. Results are consistent with predictions of the factor-intensity model of trade. Regression results suggest that import protection makes income distribution worse for countries in labor-intensive diversification cones. This relationship shifts to one of falling inequality as incomes rise and we move to capital-intensive diversification cones.
- D31 : Personal Income, Wealth, and Their Distributions
- O15 : Human Resources; Human Development; Income Distribution; Migration
- F13 : Commercial Policy; Protection; Promotion; Trade Negotiations; International Organizations
- income
- inequality
- distribution
- household
- import protection
- trade
- country
- tariff
- import
- index
- household distribution
- protection
- equation
- atkinson
- result
- income distribution
- coefficient
- regression
- literature
- gini coefficient
