Working Paper: CEPR ID: DP8382
Authors: Mary Amiti; Lisa Cameron
Abstract: In this paper, we analyze the effect of reducing import tariffs on intermediate inputs and final goods on the wage skill premium within firms in Indonesia ? a country with a high share of unskilled workers. We present a new finding that reducing input tariffs reduces the wage skill premium within firms that import their intermediate inputs. However, we do not find significant effects from reducing tariffs on final goods on the wage skill premium within firms.
Keywords: Import Tariffs; Intermediate Inputs; Wage Inequality
JEL Codes: F10; F12; F13; F14; F16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| reducing input tariffs (F13) | decrease in wage skill premium (F66) |
| reducing input tariffs (F13) | shift in relative demand for skilled labor (J24) |
| shift in relative demand for skilled labor (J24) | decrease in wage skill premium (F66) |
| reducing output tariffs (F14) | no statistically significant effect on wage skill premium (F66) |