Factor Immobility and Regional Impacts of Trade Liberalization Evidenceon Poverty From India

Author/Editor:

Petia Topalova

Publication Date:

September 1, 2010

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 10/218

Subject:

English

Publication Date:

September 1, 2010

ISBN/ISSN:

9781455208838/1018-5941

Stock No:

WPIEA2010218

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

46

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