| Abstract |
With the anticipation of higher economic growth and a fair distribution of income, many developing countries have embarked on trade and investment policy reforms since around the early 1980s. On the c...ontrary, majority of them have experienced a rapid rise in income (wage) inequality. With the intention of contributing to the on-going debate on the distributional consequences of globalization, triggered out by rising inequality, we examined the determinants of wage inequality in the manufacturing sector for a sample of developing countries during 1976-2002. By employing random-effects panel regression technique, we found that trade, technology, and relative labour supply are some of the key determinants of skilled-unskilled wage differential and a substantial portion of the mean difference of the wage differential between lowand middle-income countries could also be explained by those factors. Our results show that the promotion of education and training is one of the indispensable tools in countering the growing skilled-unskilled wage gap, especially in low-income countries.show more
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