Trade liberalization and labor's slice of the pie: Evidence from Indian firms

• 成果类型: Article
• 署名作者: Ahsan, Reshad N.; Mitra, Devashish
• 署名单位: University of Melbourne; Syracuse University; IZA Institute Labor Economics; Leibniz Association; Ifo Institut
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2013.12.011
• 发表日期: 2014
• 页码: 1-16
• 关键词: trade reforms; Bargaining power of workers; labor share; markups; INDIA; Firm-level data

摘要

We examine the impact of trade reforms initiated in 1991 on labor's share in revenue among a sample of Indian firms. Theoretically, trade reforms will affect this share by reducing firm-level price-cost markups as well as the bargaining power of workers. A simple model suggests that these changes can have ambiguous effects on firm-level labor share and that the net effect of trade reforms will depend on the labor intensity of production. Using firm-level data from India, our empirical results suggest that trade liberalization led to an increase in labor's share in revenue for small, labor-intensive firms but a reduction in this share in the case of larger, less labor-intensive firms. These results are robust to controlling for alternative sources of heterogeneity and to the use of long-lagged tariffs as instruments. We also find that trade liberalization, on average, led to a decline in the bargaining power of workers. (C) 2014 Elsevier B.V. All rights reserved.