Trade Openness and Wage Inequality: Case of Tunisia

Abstract

The 90's have been marked by an increasing globalization which has revealed two major trends, if on the one hand there has been a more pronounced opening up, especially in the ranks of emerging countries, on the other hand there has been a considerable rise in inequalities. Despite an abundant literature on the link between trade openness and wage inequality, the latter remains relatively ambiguous, particularly in the absence of a consensus, especially for the developing countries. This article therefore focuses on the impact of trade openness on wage inequality, particularly between skilled and unskilled workers for the case of Tunisia. Our analysis took into account a number of factors that influence this relationship, such as labor market fluctuations, technological transfer and the effect of institutions. Our contribution to this work is that unlike the majority of work conducted on the Tunisian case, our analysis has not been limited to the manufacturing industry but we have extended it to the services sector and the whole economy by including the non-manufacturing sector in order to provide a comparative analysis between these different sectors The exploitation of the estimation results over the period 1990 to 2020 shows that, in general, openness has contributed to the increase in wage inequalities in Tunisia.