{
  "title": "Capital Account Liberalization and Wage Inequality: Evidence from Firm Level Data",
  "publication": "IMF Working Papers, March 3, 2023",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2023/03/02/capital-account-liberalization-and-wage-inequality-evidence-from-firm-level-data-530329",
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  "summary": "Firms play an important role in shaping income inequality at the aggregated country level, given that wages represent a significant proportion of household income.",
  "sections": [
    {
      "heading": "Research question and scope",
      "content": "- Investigates the distributional consequences of capital account liberalization on between-firms earning inequality.\n- Data universe: firm level data for ASEAN5 countries over the period 1995-2019.\n- Pages: 35\n- Series: Working Paper No. 2023/048; Volume: 2023; Issue: 048; Stock No: WPIEA2023048; DOI: https://doi.org/10.5089/9798400235139.001; ISBN: 9798400235139; ISSN: 1018-5941."
    },
    {
      "heading": "Key empirical findings",
      "content": "- Between-firms wage dispersion alone accounts for a nontrivial proportion of the variation in the market Gini.\n- Capital account liberalization increases between-firms wage inequality.\n  - Wages grow faster at initially high-paying firms.\n  - Wages slow down at firms at the lower portion of the wage distribution.\n- Results are robust to a battery of robustness checks.\n- Direction and category of liberalization matter:\n  - Effects are pronounced for inflow liberalization.\n  - Effects are pronounced for equity capital flows.\n- Capital account liberalization induces an increase in Profit-to-Wage ratios.\n- Heterogeneous impacts depending on country and industry characteristics:\n  - Country characteristics: wage setting institutions, the level of financial development, and the size of the informal sector.\n  - Industry characteristics: export orientation and external finance dependence."
    },
    {
      "heading": "Subjects and keywords",
      "content": "- Subject: Balance of payments, Capital account liberalization, Income inequality, Labor, National accounts, Production, Total factor productivity, Wage adjustments, Wages.\n- Keywords: baseline result, Capital Account Liberalization, Firm heterogeneity, Income inequality, inflow liberalization, Shakeba foster, Total factor productivity, Wage adjustments, wage dispersion, Wage Inequality, Wages.\n\nSource: IMF Working Papers — \"Capital Account Liberalization and Wage Inequality: Evidence from Firm Level Data\" by Kodjovi M. Eklou and Shakeba Foster, March 3, 2023.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2023/03/02/capital-account-liberalization-and-wage-inequality-evidence-from-firm-level-data-530329"
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    "Authors: Kodjovi M. Eklou, Shakeba Foster",
    "Published: March 3, 2023",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798400235139.001",
    "Investigates the distributional consequences of capital account liberalization on between-firms earning inequality.",
    "Data universe: firm level data for ASEAN5 countries over the period 1995-2019.",
    "Pages: 35",
    "Series: Working Paper No. 2023/048; Volume: 2023; Issue: 048; Stock No: WPIEA2023048; DOI: https://doi.org/10.5089/9798400235139.001; ISBN: 9798400235139; ISSN: 1018-5941.",
    "Between-firms wage dispersion alone accounts for a nontrivial proportion of the variation in the market Gini.",
    "Capital account liberalization increases between-firms wage inequality.",
    "Results are robust to a battery of robustness checks.",
    "Direction and category of liberalization matter:",
    "Capital account liberalization induces an increase in Profit-to-Wage ratios.",
    "Heterogeneous impacts depending on country and industry characteristics:",
    "Subject: Balance of payments, Capital account liberalization, Income inequality, Labor, National accounts, Production, Total factor productivity, Wage adjustments, Wages.",
    "Keywords: baseline result, Capital Account Liberalization, Firm heterogeneity, Income inequality, inflow liberalization, Shakeba foster, Total factor productivity, Wage adjustments, wage dispersion, Wage Inequality, Wages.",
    "**Working Paper**"
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