Capital Account Liberalization And Wage Inequality Evidence From Firm Level Data

Author : Kodjovi M. Eklou
Publisher : International Monetary Fund
ISBN 13 :
Total Pages : 35 pages
Book Rating : 4.39/5 ( download)

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Download or read book Capital Account Liberalization and Wage Inequality: Evidence from Firm Level Data written by Kodjovi M. Eklou and published by International Monetary Fund. This book was released on 2023-03-03 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: Firms play an important role in shaping income inequality at the aggregated country level, given that wages represent a significant proportion of household income. We investigate the distributional consequences of capital account liberalization, relying on firm level data to explore the implications for betweenfirms earning inequality in ASEAN5 countries over the period 1995-2019. We find that between-firms wage dispersion alone, accounts for a nontrivial proportion of the variation in the market Gini. Our empirical findings show that capital account liberalization increases between-firms wage inequality, as wages grow faster at initially high-paying firms and slow-down at firms at the lower portion of the wage distribution. These results are robust to a battery of robustness checks. Further, the directions and categories of capital account liberalization matter as results are pronounced for inflow liberalization and equity capital flows. We also show that capital account liberalization induces an increase in Profit-to-Wage ratios. Furthermore, the impact depends on country characteristics (wage setting institutions, the level of financial development and the size of the informal sector) as well as industry characteristics (export orientation and external finance dependence).

Author : Davide Furceri
Publisher : International Monetary Fund
ISBN 13 : 1513531409
Total Pages : 26 pages
Book Rating : 4.03/5 ( download)

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Download or read book Capital Account Liberalization and Inequality written by Davide Furceri and published by International Monetary Fund. This book was released on 2015-11-24 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the distributional impact of capital account liberalization. Using panel data for 149 countries from 1970 to 2010, we find that, on average, capital account liberalization reforms increase inequality and reduce the labor share of income in the short and medium term. We also find that the level of financial development and the occurrence of crises play a key role in shaping the response of inequality to capital account liberalization reforms.

Author : Mr.Martin Schindler
Publisher : International Monetary Fund
ISBN 13 : 1451873573
Total Pages : 36 pages
Book Rating : 4.73/5 ( download)

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Download or read book Who Benefits from Capital Account Liberalization? Evidence from Firm-Level Credit Ratings Data written by Mr.Martin Schindler and published by International Monetary Fund. This book was released on 2009-09-01 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: We provide new firm-level evidence on the effects of capital account liberalization. Based on corporate foreign-currency credit ratings data and a novel capital account restrictions index, we find that capital controls can substantially limit access to, and raise the cost of, foreign currency debt, especially for firms without foreign currency revenues. As an identification strategy, we exploit, via a difference-in-difference approach, within-country variation in firms' access to foreign currency, measured by whether or not a firm belongs to the nontradables sector. Nontradables firms benefit substantially more from capital account liberalization than others, a finding that is robust to a broad range of alternative specifications.

Author : Md. Al-Amin Parvez
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.44/5 ( download)

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Download or read book Capital Account Liberalization (CAL) and Income Inequality written by Md. Al-Amin Parvez and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The opening of capital account of an economy allows the financially constrained local firms to attract and raise cost efficient capital from abroad in one hand and on the other hand allows the well performing and financially solvent local firms to go out other countries and avail the external economics of scale, low-cost factors of production and explore new markets. Since capital and skilled labor are relative complements, the opening of capital account could result in a higher income inequality between the skilled and unskilled labor classes. To present some pieces of evidence in this regard, a panel data set with secondary data of 11 Asia-Pacific countries have been analyzed by applying the general panel data analysis techniques and GMM model for both de jure and de facto measures. It has been found that the capital account liberalization (CAL) would increase the incomes more of skilled labor working in the industries than the unskilled labor.

Author : Mr.Michael Kumhof
Publisher : International Monetary Fund
ISBN 13 : 1455210757
Total Pages : 39 pages
Book Rating : 4.56/5 ( download)

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Download or read book Inequality, Leverage and Crises written by Mr.Michael Kumhof and published by International Monetary Fund. This book was released on 2010-11-01 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper studies how high leverage and crises can arise as a result of changes in the income distribution. Empirically, the periods 1920-1929 and 1983-2008 both exhibited a large increase in the income share of the rich, a large increase in leverage for the remainder, and an eventual financial and real crisis. The paper presents a theoretical model where these features arise endogenously as a result of a shift in bargaining powers over incomes. A financial crisis can reduce leverage if it is very large and not accompanied by a real contraction. But restoration of the lower income group's bargaining power is more effective.

Author : Mr.Barry J. Eichengreen
Publisher : International Monetary Fund
ISBN 13 : 1513566385
Total Pages : 37 pages
Book Rating : 4.82/5 ( download)

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Download or read book Financial Globalization and Inequality: Capital Flows as a Two-Edged Sword written by Mr.Barry J. Eichengreen and published by International Monetary Fund. This book was released on 2021-01-08 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: We review the debate on the association of financial globalization with inequality. We show that the within-country distributional impact of capital account liberalization is context specific and that different types of flows have different distributional effects. Their overall impact depends on the composition of capital flows, their interaction, and on broader economic and institutional conditions. A comprehensive set of policies – macroeconomic, financial and labor- and product-market specific – is important for facilitating wider sharing of the benefits of financial globalization.

Author : Ms.Era Dabla-Norris
Publisher : International Monetary Fund
ISBN 13 : 1513547437
Total Pages : 39 pages
Book Rating : 4.35/5 ( download)

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Download or read book Causes and Consequences of Income Inequality written by Ms.Era Dabla-Norris and published by International Monetary Fund. This book was released on 2015-06-15 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the extent of income inequality from a global perspective, its drivers, and what to do about it. The drivers of inequality vary widely amongst countries, with some common drivers being the skill premium associated with technical change and globalization, weakening protection for labor, and lack of financial inclusion in developing countries. We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down. This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class. To tackle inequality, financial inclusion is imperative in emerging and developing countries while in advanced economies, policies should focus on raising human capital and skills and making tax systems more progressive.

Author : Jorge Alvarez
Publisher : International Monetary Fund
ISBN 13 : 1484333039
Total Pages : 59 pages
Book Rating : 4.37/5 ( download)

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Download or read book Firms and the Decline in Earnings Inequality in Brazil written by Jorge Alvarez and published by International Monetary Fund. This book was released on 2017-12-14 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: We document a large decrease in earnings inequality in Brazil between 1996 and 2012. Using administrative linked employer-employee data, we fit high-dimensional worker and firm fixed effects models to understand the sources of this decrease. Firm effects account for 40 percent of the total decrease and worker effects for 29 percent. Changes in observable worker and firm characteristics contributed little to these trends. Instead, the decrease is primarily due to a compression of returns to these characteristics, particularly a declining firm productivity pay premium. Our results shed light on potential drivers of earnings inequality dynamics.

Author : Chris Papageorgiou
Publisher : International Monetary Fund
ISBN 13 :
Total Pages : 42 pages
Book Rating : 4.79/5 ( download)

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Download or read book Rising Income Inequality written by Chris Papageorgiou and published by International Monetary Fund. This book was released on 2008-07 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the relationship between trade and financial globalization and the rise in inequality in most countries in recent decades. We find technological progress as having a greater impact than globalization on inequality. The limited overall impact of globalization reflects two offsetting tendencies: whereas trade globalization is associated with a reduction in inequality, financial globalization-and foreign direct investment in particular-is associated with an increase. A key finding is that both globalization and technological changes increase the returns on human capital, underscoring the importance of education and training in both developed and developing countries in addressing rising inequality.

Author : Ms. Valerie Cerra
Publisher : International Monetary Fund
ISBN 13 : 1513572660
Total Pages : 54 pages
Book Rating : 4.66/5 ( download)

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Download or read book Links Between Growth, Inequality, and Poverty: A Survey written by Ms. Valerie Cerra and published by International Monetary Fund. This book was released on 2021-03-12 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: Is there a tradeoff between raising growth and reducing inequality and poverty? This paper reviews the theoretical and empirical literature on the complex links between growth, inequality, and poverty, with causation going in both directions. The evidence suggests that growth can be effective in reducing poverty, but its impact on inequality is ambiguous and depends on the underlying sources of growth. The impact of poverty and inequality on growth is likewise ambiguous, as several channels mediate the relationship. But most plausible mechanisms suggest that poverty and inequality reduce growth, at least in the long run. Policies play a role in shaping these relationships and those designed to improve equality of opportunity can simultaneously improve inclusiveness and growth.