This paper brings together three strands of literature on the determinants of international trade − distance, formal, and informal institutions − to explain differences in export performance across countries. Using an augmented gravity model, we find that the importance of formal institutions (rule of law) for bilateral trade increases with distance. Similarly, the pro-trade effect of informal institutions (migrant networks) is larger for distant countries. After confirming that informal institutions can substitute for weak formal institutions in promoting trade, we finally show that this substitution effect does not decrease with distance. Our findings contribute to explaining the persistent negative effect of distance on the export performance of many developing countries despite reductions in trade costs, and provide guidance to policy makers in terms of trade reform, regional trade liberalization and export promotions strategies.
{"title":"Distance, Formal and Informal Institutions in International Trade","authors":"Rainer Lanz, Woori Lee, Victor Stolzenburg","doi":"10.30875/a3af8f03-en","DOIUrl":"https://doi.org/10.30875/a3af8f03-en","url":null,"abstract":"This paper brings together three strands of literature on the determinants of international trade − distance, formal, and informal institutions − to explain differences in export performance across countries. Using an augmented gravity model, we find that the importance of formal institutions (rule of law) for bilateral trade increases with distance. Similarly, the pro-trade effect of informal institutions (migrant networks) is larger for distant countries. After confirming that informal institutions can substitute for weak formal institutions in promoting trade, we finally show that this substitution effect does not decrease with distance. Our findings contribute to explaining the persistent negative effect of distance on the export performance of many developing countries despite reductions in trade costs, and provide guidance to policy makers in terms of trade reform, regional trade liberalization and export promotions strategies.","PeriodicalId":178903,"journal":{"name":"WTO Working Papers","volume":"111 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117254371","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper explores how regulatory responses to emerging IP issues in digital trade may develop at the international level and in particular how existing mechanisms might influence the chances of developing internationally agreed rules in this regard. The primacy of state sovereignty in intellectual property up to the late 19th century gave way to the important WIPO treaties, which still retained some independence of member states and based international regulatory responses directly on national experience. While more regulatory sovereignty was ceded in TRIPS, the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty, the adoption of non-binding instruments (such as the WIPO Joint Recommendations in the area of trademarks) show the limits of decision making by consensus. International non-state solutions such as the Uniform DomainName Dispute-Resolution Policy (UDRP) established by the Internet Corporation for Assigned Names and Numbers (ICANN) have introduced separate, technically determined solutions to specific IP issues. Proliferating free-trade agreements (FTAs) have emerged as a new platform to agree to IPrelated regulatory responses that can be used to project the national solutions of a few dominant FTA-partners. However, these FTAs have also served to give legally binding status to internationally agreed non-binding recommendations. These diverse approaches are apparent in recent IPregulatory responses to emerging digital issues that are particularly relevant for digital business models, including inter alia Internet service provider (ISP) liability, "safe harbour" provisions and the issue of orphan works, where there appears to be less agreement. Still further behind to reaching any kind of agreement are the emerging issues of online exhaustion, data mining and IP-related questions of artificial intelligence.
{"title":"Intellectual Property and Digital Trade Mapping International Regulatory Responses to Emerging Issues","authors":"Wolf R. Meier-Ewert, J. Gutiérrez","doi":"10.30875/38c801bc-en","DOIUrl":"https://doi.org/10.30875/38c801bc-en","url":null,"abstract":"This paper explores how regulatory responses to emerging IP issues in digital trade may develop at the international level and in particular how existing mechanisms might influence the chances of developing internationally agreed rules in this regard. The primacy of state sovereignty in intellectual property up to the late 19th century gave way to the important WIPO treaties, which still retained some independence of member states and based international regulatory responses directly on national experience. While more regulatory sovereignty was ceded in TRIPS, the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty, the adoption of non-binding instruments (such as the WIPO Joint Recommendations in the area of trademarks) show the limits of decision making by consensus. International non-state solutions such as the Uniform DomainName Dispute-Resolution Policy (UDRP) established by the Internet Corporation for Assigned Names and Numbers (ICANN) have introduced separate, technically determined solutions to specific IP issues. Proliferating free-trade agreements (FTAs) have emerged as a new platform to agree to IPrelated regulatory responses that can be used to project the national solutions of a few dominant FTA-partners. However, these FTAs have also served to give legally binding status to internationally agreed non-binding recommendations. These diverse approaches are apparent in recent IPregulatory responses to emerging digital issues that are particularly relevant for digital business models, including inter alia Internet service provider (ISP) liability, \"safe harbour\" provisions and the issue of orphan works, where there appears to be less agreement. Still further behind to reaching any kind of agreement are the emerging issues of online exhaustion, data mining and IP-related questions of artificial intelligence.","PeriodicalId":178903,"journal":{"name":"WTO Working Papers","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126336888","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper compares the solution methods and baseline calibration of three different quantitative trade models (QTMs): computable general equilibrium (CGE) models, structural gravity (SG) models and models employing exact hat algebra (EHA). The different solution methods generate identical results on counterfactual experiments if baseline trade shares or baseline trade costs are identical. SG models, calibrating the baseline to gravity-predicted shares, potentially suffer from bias in the predicted welfare effects as a result of misspecification of the gravity equation, whereas the other methods, calibrating to actual shares, potentially suffer from bias as a result of random variation and measurement error of trade flows. Simulations show that predicted shares calibration can generate large biases in predicted welfare effects if the gravity equation does not contain pairwise fixed effects or is estimated without domestic trade flows. Calibration to actual shares and to fitted shares based on gravity estimation including pairwise fixed effects display similar performance in terms of robustness to the different sources of bias.
{"title":"The welfare effects of trade policy experiments in quantitative trade models","authors":"E. Bekkers","doi":"10.30875/bdb5e37d-en","DOIUrl":"https://doi.org/10.30875/bdb5e37d-en","url":null,"abstract":"This paper compares the solution methods and baseline calibration of three different quantitative trade models (QTMs): computable general equilibrium (CGE) models, structural gravity (SG) models and models employing exact hat algebra (EHA). The different solution methods generate identical results on counterfactual experiments if baseline trade shares or baseline trade costs are identical. SG models, calibrating the baseline to gravity-predicted shares, potentially suffer from bias in the predicted welfare effects as a result of misspecification of the gravity equation, whereas the other methods, calibrating to actual shares, potentially suffer from bias as a result of random variation and measurement error of trade flows. Simulations show that predicted shares calibration can generate large biases in predicted welfare effects if the gravity equation does not contain pairwise fixed effects or is estimated without domestic trade flows. Calibration to actual shares and to fitted shares based on gravity estimation including pairwise fixed effects display similar performance in terms of robustness to the different sources of bias.","PeriodicalId":178903,"journal":{"name":"WTO Working Papers","volume":"649 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132126930","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Marrakesh Agreement establishing the WTO recognizes the need for positive efforts designed to ensure that developing countries and especially the least developed among them secure a share in the growth in international trade commensurate with the needs of their economic development.This article discusses how the WTO contributes to facilitating Africa's integration into the WTO multilateral trading system. It is argued that, while African countries are actively engaged in the work of the WTO, securing their economic and policy interests, some main challenges remain. These include the need to further diversify production, linking to the Global Value Chains and developing adequate infra-structures facilitating digital trade as a vehicle for economic growth. The WTO, in close collaboration with partner institutions, lends its support to Africa in overcoming some of these issues through various programs, all geared towards trade capacity building. It is argued that the work undertaken by WTO Chairs and academic institutions under the aegis of the WTO's Chairs Program (WCP) is of critical importance in providing the analytical underpinnings for the policy choices in support of a fuller integration in the multilateral trading system. Preparations are under way meeting all the conditions for this program to be significantly expanded and deepened in 2021 with a view of further strengthening its capacity to provide support to beneficiaries and especially LDCs, hence African countries, integrating in the multilateral trading system.
{"title":"Africa’s Integration in the WTO Multilateral Trading System","authors":"M. Smeets","doi":"10.30875/5717be76-en","DOIUrl":"https://doi.org/10.30875/5717be76-en","url":null,"abstract":"The Marrakesh Agreement establishing the WTO recognizes the need for positive efforts designed to ensure that developing countries and especially the least developed among them secure a share in the growth in international trade commensurate with the needs of their economic development.This article discusses how the WTO contributes to facilitating Africa's integration into the WTO multilateral trading system. It is argued that, while African countries are actively engaged in the work of the WTO, securing their economic and policy interests, some main challenges remain. These include the need to further diversify production, linking to the Global Value Chains and developing adequate infra-structures facilitating digital trade as a vehicle for economic growth. The WTO, in close collaboration with partner institutions, lends its support to Africa in overcoming some of these issues through various programs, all geared towards trade capacity building. It is argued that the work undertaken by WTO Chairs and academic institutions under the aegis of the WTO's Chairs Program (WCP) is of critical importance in providing the analytical underpinnings for the policy choices in support of a fuller integration in the multilateral trading system. Preparations are under way meeting all the conditions for this program to be significantly expanded and deepened in 2021 with a view of further strengthening its capacity to provide support to beneficiaries and especially LDCs, hence African countries, integrating in the multilateral trading system.","PeriodicalId":178903,"journal":{"name":"WTO Working Papers","volume":"121 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126961685","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The Shifting Contours of Trade in Knowledge","authors":"A. Taubman","doi":"10.30875/3e815577-en","DOIUrl":"https://doi.org/10.30875/3e815577-en","url":null,"abstract":"","PeriodicalId":178903,"journal":{"name":"WTO Working Papers","volume":"111 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124098121","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study provides a decomposition of the WTO Global Trade Costs Index into five policy-relevant components: transport and travel costs; information and transaction costs; ICT connectedness; trade policy and regulatorydifferences; and governance quality. The WTO Global Trade CostsIndex is based on a new methodology by Egger et al. (2021) that delivers directional trade cost estimates and sector-specific elasticities whichare crucialforinferring tradecostsfromtradeflows data. Theresulting measure of trade costs includes all factors that burden foreign sales more than domestic ones. In this study, we run a sectoral regression analysis to determine what drives trade costs variation across partners and use the resultstodecompose the variation in trade costsin eachsector. We show that transport and travel costs play the most important role in overall trade costs both for goods and services. Tradepolicy and regulatorydifferences are the second major component of trade costs in most sectors, accounting for at least 14%. The importance of this component is particularly striking for trade among lower-income economies. Moreover, our results alsoshow that trade policy in services sectors matters for trade costs in goods, and vice versa. Finally, we find that access to information and communication technology is especially important for tradecostsin services where its importance hasincreasedover time, highlighting the role that digitaldelivery plays in this sector.
{"title":"The WTO Global Trade Costs Index and Its Determinants","authors":"S. Rubínová, Mehdi Sebti","doi":"10.30875/29ba5a43-en","DOIUrl":"https://doi.org/10.30875/29ba5a43-en","url":null,"abstract":"This study provides a decomposition of the WTO Global Trade Costs Index into five policy-relevant components: transport and travel costs; information and transaction costs; ICT connectedness; trade policy and regulatorydifferences; and governance quality. The WTO Global Trade CostsIndex is based on a new methodology by Egger et al. (2021) that delivers directional trade cost estimates and sector-specific elasticities whichare crucialforinferring tradecostsfromtradeflows data. Theresulting measure of trade costs includes all factors that burden foreign sales more than domestic ones. In this study, we run a sectoral regression analysis to determine what drives trade costs variation across partners and use the resultstodecompose the variation in trade costsin eachsector. We show that transport and travel costs play the most important role in overall trade costs both for goods and services. Tradepolicy and regulatorydifferences are the second major component of trade costs in most sectors, accounting for at least 14%. The importance of this component is particularly striking for trade among lower-income economies. Moreover, our results alsoshow that trade policy in services sectors matters for trade costs in goods, and vice versa. Finally, we find that access to information and communication technology is especially important for tradecostsin services where its importance hasincreasedover time, highlighting the role that digitaldelivery plays in this sector.","PeriodicalId":178903,"journal":{"name":"WTO Working Papers","volume":"46 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125234831","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The WTO Global Trade Model is employed to project the medium-run economic effects of a global trade conflict. The trade conflict scenario is based on recent estimates in the literature of the difference between cooperative and non-cooperative tariffs. The study provides three main insights. First, the projected macroeconomic effects in the medium run are considerable. A global trade conflict started in 2019 would lead to a reduction in global GDP in 2022 of about 1.96% and a reduction in global trade of about 17% compared to the baseline. For context global GDP fell about 2.1% and global trade 12.4% in the global financial crisis of 2009. Second, behind the single-digit aggregate production effects there are much larger, double-digit sectoral production effects in many countries, leading to a painful adjustment process. In general, a global trade conflict leads to a reallocation of resources away from the most efficient allocation based on comparative advantage. Third, the large swings in sectoral production lead to substantial labour displacement. On average 1.15% and 1.74% of high-skilled and low-skilled workers respectively would leave their initial sector of employment.
{"title":"Potential Economic Effects of a Global Trade Conflict","authors":"E. Bekkers, Robert R. Teh","doi":"10.30875/7dc4c62e-en","DOIUrl":"https://doi.org/10.30875/7dc4c62e-en","url":null,"abstract":"The WTO Global Trade Model is employed to project the medium-run economic effects of a global trade conflict. The trade conflict scenario is based on recent estimates in the literature of the difference between cooperative and non-cooperative tariffs. The study provides three main insights. First, the projected macroeconomic effects in the medium run are considerable. A global trade conflict started in 2019 would lead to a reduction in global GDP in 2022 of about 1.96% and a reduction in global trade of about 17% compared to the baseline. For context global GDP fell about 2.1% and global trade 12.4% in the global financial crisis of 2009. Second, behind the single-digit aggregate production effects there are much larger, double-digit sectoral production effects in many countries, leading to a painful adjustment process. In general, a global trade conflict leads to a reallocation of resources away from the most efficient allocation based on comparative advantage. Third, the large swings in sectoral production lead to substantial labour displacement. On average 1.15% and 1.74% of high-skilled and low-skilled workers respectively would leave their initial sector of employment.","PeriodicalId":178903,"journal":{"name":"WTO Working Papers","volume":"16 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128424580","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Proper measurement and aggregation of trade costs is of paramount importance for sound academic and policy analysis of the determinants - particularly those of policy - of economic outcomes. The international trade profession has witnessed significant new developments, both on the theoretical and on the empirical side, concerning the measurement and decomposition of such costs into variable and fixed costs on the one hand and into partial and general equilibrium effects on the other hand. The objectives and main contributions of this project are to offer guidance for proper measurement, aggregation, and decomposition of trade costs into fixed vs. variable and partial vs. general equilibrium costs across two broad dimensions, one including overall trade costs vs. policy measures vs. transportation costs vs. natural trade barriers vs. uncertainty and another one including geography vs. product vs. household income level vs. agent.
{"title":"Trade Costs in the Global Economy","authors":"P. Egger, Mario Larch, Sergey Nigai, Y. Yotov","doi":"10.30875/e6c4c0b1-en","DOIUrl":"https://doi.org/10.30875/e6c4c0b1-en","url":null,"abstract":"Proper measurement and aggregation of trade costs is of paramount importance for sound academic and policy analysis of the determinants - particularly those of policy - of economic outcomes. The international trade profession has witnessed significant new developments, both on the theoretical and on the empirical side, concerning the measurement and decomposition of such costs into variable and fixed costs on the one hand and into partial and general equilibrium effects on the other hand. The objectives and main contributions of this project are to offer guidance for proper measurement, aggregation, and decomposition of trade costs into fixed vs. variable and partial vs. general equilibrium costs across two broad dimensions, one including overall trade costs vs. policy measures vs. transportation costs vs. natural trade barriers vs. uncertainty and another one including geography vs. product vs. household income level vs. agent.","PeriodicalId":178903,"journal":{"name":"WTO Working Papers","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131361146","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
From its initial focus on minimizing waste generation, the circular economy has evolved into a broad-based approach to make resource use more sustainable. A big part of the appeal of a circular economy is the opportunities it creates not only for resource savings and better human health and environmental outcomes, but also for trade and economic diversification. As interest in circular economy approaches grows, it becomes increasingly important to ensure that trade policies are designed and implemented with the goals of a circular economy in mind. Doing so would bolster the role of trade in scaling up circular economy solutions worldwide. This paper reviews work at the WTO related to the circular economy. It shows how WTO members have addressed issues related to the circular economy through policy dialogue, peer review, negotiations and more recently, Aid for Trade. Experience in these four areas provides valuable insights into how WTO members can expand the positive contribution of trade to a circular economy, not least by: (i) improving their collective understanding of how trade interacts with the circular economy; (ii) building trust and confidence to engage in mutually beneficial activities related to circular economy; (iii) opening and facilitating trade in key areas of the circular economy; and (iv) supporting efforts in developing countries to seize the potential environmental, economic and social benefits of a circular economy through enhanced trade.
{"title":"Trade Policies for a Circular Economy","authors":"K. Steinfatt","doi":"10.30875/2ced559e-en","DOIUrl":"https://doi.org/10.30875/2ced559e-en","url":null,"abstract":"From its initial focus on minimizing waste generation, the circular economy has evolved into a broad-based approach to make resource use more sustainable. A big part of the appeal of a circular economy is the opportunities it creates not only for resource savings and better human health and environmental outcomes, but also for trade and economic diversification. As interest in circular economy approaches grows, it becomes increasingly important to ensure that trade policies are designed and implemented with the goals of a circular economy in mind. Doing so would bolster the role of trade in scaling up circular economy solutions worldwide. This paper reviews work at the WTO related to the circular economy. It shows how WTO members have addressed issues related to the circular economy through policy dialogue, peer review, negotiations and more recently, Aid for Trade. Experience in these four areas provides valuable insights into how WTO members can expand the positive contribution of trade to a circular economy, not least by: (i) improving their collective understanding of how trade interacts with the circular economy; (ii) building trust and confidence to engage in mutually beneficial activities related to circular economy; (iii) opening and facilitating trade in key areas of the circular economy; and (iv) supporting efforts in developing countries to seize the potential environmental, economic and social benefits of a circular economy through enhanced trade.","PeriodicalId":178903,"journal":{"name":"WTO Working Papers","volume":"48 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132901421","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Enrico Nano, Gaurav Nayyar, S. Rubínová, Victor Stolzenburg
This paper studies the impact of services liberalization on education and the gender education gap at the district level in India. We focus on the time period 1987 to 1999 and three services sectors - banking, insurance and telecommunications - which were all state monopolies, have been heavily liberalized in the time frame studied, have relatively high shares of female employment and require high education investments. Our hypothesis is that the national-level liberalization spurred higher investment in education, particularly girls' education, in districts with higher employment growth in these key services sectors. We employ a first difference strategy to control for unobserved time-invariant heterogeneity, use an IV procedure to eliminate other potential sources of bias and control for the simultaneous tariff liberalization. Our results indicate that employment growth in liberalized services sectors is a consistently significant determinant of both the average number of years of schooling (positively) and the gender education gap (negatively). These effects are at least as relevant as those of merchandise trade liberalization, are persistent and driven mostly by the banking and, to a lower extent, the telecommunications sectors. Looking at the transmission channels, we employ a 3SLS strategy and observe that both growing incomes and higher returns to education drive this relationship.
{"title":"The Impact of Services Liberalization on Education","authors":"Enrico Nano, Gaurav Nayyar, S. Rubínová, Victor Stolzenburg","doi":"10.30875/186bad5c-en","DOIUrl":"https://doi.org/10.30875/186bad5c-en","url":null,"abstract":"This paper studies the impact of services liberalization on education and the gender education gap at the district level in India. We focus on the time period 1987 to 1999 and three services sectors - banking, insurance and telecommunications - which were all state monopolies, have been heavily liberalized in the time frame studied, have relatively high shares of female employment and require high education investments. Our hypothesis is that the national-level liberalization spurred higher investment in education, particularly girls' education, in districts with higher employment growth in these key services sectors. We employ a first difference strategy to control for unobserved time-invariant heterogeneity, use an IV procedure to eliminate other potential sources of bias and control for the simultaneous tariff liberalization. Our results indicate that employment growth in liberalized services sectors is a consistently significant determinant of both the average number of years of schooling (positively) and the gender education gap (negatively). These effects are at least as relevant as those of merchandise trade liberalization, are persistent and driven mostly by the banking and, to a lower extent, the telecommunications sectors. Looking at the transmission channels, we employ a 3SLS strategy and observe that both growing incomes and higher returns to education drive this relationship.","PeriodicalId":178903,"journal":{"name":"WTO Working Papers","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130736932","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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