| dc.description.abstract | This thesis evaluates empirically how globalization has affected occupational wages in both developing and developed countries. Three aspects of globalization – openness to trade, openness to capital and offshore-outsourcing – are examined in four self-contained essays. The first two essays evaluate the effects of increased trade liberalization on the wage gaps between skilled and unskilled workers in the Bangladesh manufacturing sector. The third and the fourth essays analyze the effects of globalization on occupational wages in both developing and developed countries. The first essay is a time series analysis using data from the Bangladesh cotton textile industry covering the 1973-2002 period. A dynamic two-equation model is estimated for real wages of skilled and unskilled workers. The findings suggest that while openness to trade increased both skilled and unskilled real wages, it did not affect them differently, implying that openness per se did not contribute to changes in wage inequality. Essay 2 further investigates the issues in Essay 1, but performs a panel data analysis using data from five manufacturing industries (Jute, Cotton textile, Match, Engineering, and Mustard oil) covering the 1975-2002 period. Several standard models are used to estimate wage equations for skilled and unskilled workers. The results, particularly the estimates from a dynamic fixed effects model, provide some weak evidence that trade liberalization did contribute to a reduction in wage inequality. Consistent with the findings in Essay 1, the results also suggest that it increased wages for both skilled and unskilled workers. The third essay empirically examines how globalization affects inter-occupational wage inequality within countries. It focuses on two dimensions of globalization, openness to trade and openness to capital, using a relatively new dataset on occupational wages. Estimates from dynamic models for 52 countries over the 1983-2002 period suggest that openness to trade contributes to an increase in occupational wage inequality within developed countries, but that the effect diminishes with an increased level of development. In terms of developing countries, the results show that the effect of openness to trade on wage inequality is insignificant and does not vary with the level of development. The results furthermore suggest that openness to capital does not affect occupational wage inequality in either developed or developing countries. Offshoring has changed the pattern of international competition; labor in specific occupations rather than in firms and sectors are now facing competition. Accordingly, wages in offshorable occupations are affected in new ways. The fourth essay investigates the effects of offshoring of electronically traded services on relative occupational wages in 13 countries in the 1990-2003 period. The findings suggest that in developing countries, increased exports of IT-related services lead to higher relative wages in offshorable occupations, whereas increased imports of such services reduce relative wages. In the most developed countries, however, relative wages were not significantly affected. | en |
