Tri Mulyaningsih


This study concerns with labour market in Indonesia, an labour-abundant country, considering the impact of trade liberalization on inequalities. It focuses on the transmission of ASEAN intra-trade on inequalities through the changing of the relative price of skilled and unskilled labour. This study relies on manufacturing survey data collecting information of more than 24 thousand firms classified under 13 sectors of Harmonized System (HS). The estimation shows that international trade has contribution on wage differentials in the Indonesian labour market. Lower tariffs are associated with widen wage differentials between skilled and unskilled workers in the Indonesian manufacturing industries.

Keywords: Trade Liberalization, Labor Market, Skill Inequalities, Indonesia

Full Text:



Amiti, M., & Cameron, L. (2012). Trade Liberalization and the Wage Skill Premium: Evidence from Indonesia. Journal of International Economics, 87, 277-287.

Badan Pusat Statistik. (2000 - 2013). SAKERNAS. Jakarta: Badan Pusat Statistik .

BetrĂ¡n, C., & Pons, M. A. (2004). Skilled and Unskilled Wage Differentials and Economic Integration, 1870-1930. European Review of Economic History, 8, 29-60.

Bliss, C. (2007). Trade, Growth, and Inequality. New York: Oxford University Press.

Katz, L. F., & Murphy, K. M. (1992). Changes in Relative Wages, 1963-1987: Supply and Demand Factors. The Quarterly Journal of Economics, 107, 35-78.

Kis-Katos, K., & Sparrow, R. (2015). Poverty, Labor Markets and Trade Liberalization in Indonesia. Journal of Development Economics, 117, 94-106.

Kumar, U., & Mishra, P. (2008). Trade Liberalization and Wage Inequality: Evidence from India. Review of Development Economics, 12, 291-311.

Lee, J. W., & Wie, D. (2013). Technological Change, Skill Demand, and Wage Inequality in Indonesia. Manilla: ADB Economics Working Paper Series.

Mamoon, D., & Murshed, S. M. (2013). Education Bias of Trade Liberalization and Wage Inequality in Developing Countries. The Journal of International Trade & Economic Development, 22, 572-604.

Manning, C. (2014). Labour Market Regulation and Employment During the Yudhoyono Years in Indonesia. Trade, Development and Political Economy in East Asia : Essays in Honour of HALL Hill, ISEAS Publishing, Singapore, 153-172.

Mehta, A., & Mohr, B. A. (2012). Economic Liberalization and Rising College Premiums in Mexico: A Reinterpretation. World Development, 40, 1908-1920.

Okabe, M., & Urata, S. (2014). The impact of AFTA on intra-AFTA trade. Journal of Asian Economics, 35, 12-31.

Pavcnik, N., Blom, P. G. A., & Schady, N. (2004). Trade Liberalization and Industry Wage Structure: Evidence from Brazil. World Bank Economic Review, 18, 319-344.

Revenga, A. (1997). Employment and Wage Effects of Trade Liberalization: The case of Mexican Manufacturing. Journal of Labor Economics, 15, S20-S43.

Ripoll, M. (2005). Trade Liberalization and Skill Premium in Developing Economies. Journal of Monetary Economics, 52, 601-619.

Robertson, R. (2004). Relative Prices and Wage Inequality: Evidence from Mexico. Journal of International Economics, 64, 387-409.

Sangkaew, P. (2013). Trade Liberalisation, Labour Productivity and Wage Inequality: The Case of The Thai Manufacturing Sector. Doctor of Philosophy. University of Wollongong.

Velde, D. T., & Morrissey, O. (2004). Foreign Direct Investment, Skills and Wage Inequality in East Asia. Journal of the Asia Pacific Economy, 9, 348-369.

Thorbecke, W. (2010). An Empirical Analysis of ASEAN's Labor-Intensive Exports. Journal of Asian Economics, 21, 505-513.

Verhoogen, E. A. (2008). Trade, Quality Upgrading, and Wage Inequality in The Mexican Manufacturing Sector. Quarterly Journal of Economics, 123, 489-530.


  • There are currently no refbacks.