The impact of international trade on informality and wages

Abstract

This thesis examines the links between trade and two main outcomes: informality and wages. It contributes to a wide strand of literature examining the impacts of globalization, particularly trade. Our first chapter is co-authored by Carol Newman and John Rand, second and third chapters are single-authored. The first chapter of this thesis links firm-level informality with trade liberalization in the form of tariff cuts. We show that domestic intermediate input suppliers are different from domestic final goods suppliers in the way they are affected by trade and in the way they make formalization decisions. The second chapter links within-industry wage premia of different occupational groups to trade showing that particular groups, constructed according to skill level and task characteristics, are affected differently by exports in terms of wages and employment. The third chapter complements the second chapter and shows that occupational exposure to exports is more important than industry exposure, and that particular occupations are favoured by exports in terms of wages.