IMF Working Papers

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

By Petia Topalova

September 1, 2010

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Petia Topalova. Factor Immobility and Regional Impacts of Trade Liberalization Evidenceon Poverty From India, (USA: International Monetary Fund, 2010) accessed November 8, 2024
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.

Subject: Consumption, International trade, Labor, National accounts, Poverty, Tariffs, Taxes, Trade liberalization

Keywords: Analysis of the trade liberalization-poverty link, Consumption, D. trade liberalization, Dependent variable, Europe, India, Labor market, Liberalization dummy, Post liberalization indicator, Poverty, Poverty rate, Poverty-tariff link, Production sector, Tariff, Tariffs, Trade Liberalization, Trade liberalization Evidenceon poverty, Trade liberalization link, Trade policy, Trade reform, Wage premia, WP

Publication Details

  • Pages:

    46

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2010/218

  • Stock No:

    WPIEA2010218

  • ISBN:

    9781455208838

  • ISSN:

    1018-5941

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