Disentangling the impact of trade barriers on wages: evidence from the MENA region

ABSTRACT This paper proposes a comprehensive assessment of the effect of different trade barriers (tariffs, non-tariff measures and services restrictions) on wage disparities in the Middle East and North Africa (MENA) region. We look at wage disparities from three dimensions: industry premia, gender-based and skill-based disparities. We use three Labor Market Surveys for Egypt, Jordan, and Tunisia to directly assess the effect of trade policy on wage disparities using the human capital model. To which different trade barriers are added. Our results suggest that, in general, the effect of services restrictions and non-tariff measures is much stronger than that of tariffs on wage premium. When we look at different segments, we found that females are more affected by non-tariff measures than their male counterparts. At the skill level, given the abundancy of blue collars in the MENA region, production workers are less affected by both non-tariff measures and by services restrictions than non-production workers but more affected by tariffs.