Home » Factor Immobility and Regional Impacts of Trade Liberalization Evidence on Poverty from India by Petia Topalova
Factor Immobility and Regional Impacts of Trade Liberalization Evidence on Poverty from India Petia Topalova

Factor Immobility and Regional Impacts of Trade Liberalization Evidence on Poverty from India

Petia Topalova

Published September 1st 2010
ISBN : 9781283565325
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48 pages
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This paper uses the 1991 Indian trade liberalization to measure the impact of trade liberalization on poverty, and to examine the mechanisms underpinning this impact. Variation in sectoral composition across districts and liberalization intensityMoreThis paper uses the 1991 Indian trade liberalization to measure the impact of trade liberalization on poverty, and to examine the mechanisms underpinning this impact. Variation in sectoral composition across districts and liberalization intensity across production sectors allows a difference-in-difference approach. Rural districts, in which production sectors more exposed to liberalization were concentrated, experienced slower decline in poverty and lower consumption growth. The impact of liberalization was most pronounced among the least geographically mobile, at the bottom of the income distribution, and in Indian states where inflexible labor laws impeded factor reallocation across sectors.