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http://hdl.handle.net/2451/31374
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| Title: | Capital Market Integration and Wages |
| Authors: | Henry, Peter Blair
Chari, Anusha
Sasson, Diego |
| Issue Date: | 14-Dec-2011 |
| Series/Report no.: | FIN-11-041 |
| Abstract: | For three years after the typical emerging economy opens its stock
market to inflows of foreign capital, the average annual growth rate of
the real wage in the manufacturing sector increases by a factor of
three. No such increase occurs in a control group of countries that do
not liberalize. The temporary increase in the growth rate of the real
wage drives up the level of average annual compensation for each worker
in the sample by $487 U.S.—an increase equal to nearly one-fifth
of their annual pre-liberalization salary. The increase in the growth
rate of labor productivity in the wake of liberalization exceeds the
increase in the growth rate of the real wage so that the increase in
workers’ incomes does not drive up unit labor costs. Overall, the
results suggest that trade in capital may have a larger impact on wages
than trade in goods. |
| URI: | http://hdl.handle.net/2451/31374 |
| Appears in Collections: | Finance Working Papers
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