The Impact of Trade and Labor Market Regulations on Employment and Wages: Evidence from Developing Countries

This paper examines the effects of openness and labor market rigidity on labor market outcomes in the manufacturing sector using panel data from 48 developing countries. Results from reduced form equations for employment and wages suggest hat on average trade liberalization has had a weak impact on employment and wages. At the same time, however, the effects of trade liberalization is any given country are conditional on the nature of labor market regulations: trade liberalization is more likely to have a positive impact on employment and wages in countries with flexible labor markets and vice versa. Additionally, more regulated labor markets tend to have higher average wages but these appear to come at the expense of sector wide employment.

Trade and Workers: Evidence from the Philippines

We combine labor force survey data with trade and production data to examine the impact of trade on wages and employment in the Philippines' manufacturing section. Our main finding are as follows. First, in contrast to findings typically reported for Latin American countries, our data indicate that wage inequality in the Philippines' manufacturing sector has declined over the period in which trade liberalization has been undertaken. This is despite the fact that reductions in tariff rates were largest in less skill intensive manufacturing industries. There has also been an absence of any secular rise in returns to higher education. Second, tariff reductions have been associated with declines in industry wage premiums in capital-intensive industries. Moreover, these declines appear to have been largest for skilled workers. Finally, tariff reductions have had an insignificant effect on both employment as well as the average hours of work of full-time employees across industries. These findings are consistent with a scenario where workers in capital-intensive industries, especially the more skilled ones, earned rents prior to trade liberalization; liberalization may have worked to erode these.

Functional identification and mapping of a gene that represses telomerase hTERT transcription in prostate cancer cells

This thesis was submitted for the degree of Doctor of Philosophy and awarded by Brunel University.Telomerase is present in over 90% of tumour tissues and immortalized cells and is tightly regulated in most normal somatic cells. This suggests the existence of regulatory mechanisms repressing telomerase in normal cells that somehow have become inactive during cancer development. In this project, I used genetic complementation in the form of microcell-mediated monochromosome transfer (MMCT) to search for chromosomes that repress telomerase activity in a prostate cancer cell line, PC-3. Microcell hybrids generated by introducing normal human chromosome 11 strongly inhibited telomerase. Telomerase is regulated primarily at the level of hTERT transcription, its catalytic subunit. Consequently, endogenous hTERT mRNA levels were measured by quantitative RT-PCR in microcell hybrids generated by transferring normal human chromosomes into a PC-3 sub-clone (PC- 3/hTERT) ectopically expressing hTERT cDNA to prevent senescence. Only hybrids constructed with transferred chromosome 11 showed strong transcriptional repression of hTERT. Next, hybrids were constructed by the MMCT transfer of chromosome 11 fragments (X-ray-induced). FISH analysis of clones with completely silenced endogenous hTERT transcription revealed in all cases a discrete chromosome 11 fragment with both the p-arm and q-arm material. A randomly selected hTERT-repressed clone was treated with ganciclovir to select against the HyTK marker and reverse the phenotype. hTERT expression in majority of GCV-resistant clones returned to levels comparable to the parent PC-3/hTERT cells. Collectively, these results provide strong functional evidence for the presence of a powerful telomerase repressor sequence on the fragment. Transfer of one repressive fragment back into mouse A9 cells was then carried out to facilitate fine-structure mapping of its sequence content. High density STS mapping of the fragment in each of the clones revealed a considerable DNA content heterogeneity across the panel. These content maps, together with a further round of MMCT to confirm hTERTrepressive activity, enabled me to identify three candidate regions on the q-arm of chromosome 11 where the repressor sequence may be located: the first region lies between map positions 64.70Mb to 65.42Mb and the other two regions each flank a single positive STS marker at 69.71Mb and 127.32Mb. KAT5, a histone modifying gene has been identified as a potential candidate for repressing hTERT.Professor Robert F Newbol

Trade Reforms, Labor Regulations and Labor-Demand Elasticities: Empirical Evidence from India

Using industry-level data disaggregated by states, this paper finds a positive impact of trade liberalization on labor-demand elasticities in the Indian manufacturing sector. These elasticities turn out to be negatively related to protection levels that vary across industries and over time. Furthermore, we find that these elasticities are not only higher for Indian states with more flexible labor regulations, they are also impacted to a larger degree by trade reforms. Finally, we find that after the reforms, volatility in productivity and output gets translated into larger wage and employment volatility, theoretically a possible consequence of larger labor-demand elasticities.

Big Reforms but Small Payoffs: Explaining the Weak Record of Growth and Employment in Indian Manufacturing

India has undertaken extensive reforms in its manufacturing sector over the last two decades. However, an acceleration of growth in manufacturing, and a corresponding increase in employment, has eluded India. Why have the reforms not produced the intended results? Using Annual Survey of Industries data at the three digit level for major Indian states, for 1980-2004, we analyze the effects of the reforms that liberalized India’s industrial licensing regime on the performance of registered manufacturing. We find that the performance of the manufacturing sector is heterogeneous across states, as well as across industries. In particular, labor intensive industries and industries dependent on infrastructure have not benefited much from reforms. Industrial performance appears to be contingent on the state specific policy and economic environment. States with relatively inflexible labor regulations have experienced slower growth of labor-intensive industries and slower employment growth overall. Additionally, states with relatively competitive product market regulations and with better infrastructure have experienced larger benefits from reforms.India; Manufacturing; Product Market Deregulation; Labor Laws, Infrastructure

Poverty and Economic Freedom: Evidence from Cross-Country Data

This paper explores the empirical relationship between poverty and economic freedom. In doing so, it estimates the levels of absolute poverty for a panel of over forty developing countries and then utilizes fixed effects and GMM-IV estimators to derive the empirical relationships. The principal empirical results that emerge from this exercise indicate that important indicators of economic freedom such as openness to trade and small size of the government are robustly associated with poverty reduction. Labor market flexibility, which reflects an important dimension of economic freedom, does not have a significant effect on poverty on average. However, there is some evidence that trade's beneficial impact on poverty has been smaller in economies with more regulated labor markets. Finally, civil liberties that encompass various types of important economic freedom such as poverty rights, rule of law, etc., also contribute significantly to poverty reduction. This result contrasts with that for political liberties, which have seemingly no impact on poverty reduction. All these suggest that economic freedom is as much important for economic growth as for poverty reduction.

What Constrains Indian Manufacturing?

India has undertaken extensive reforms in its manufacturing sector in the last two decades. However, an acceleration of growth in manufacturing, and a concomitant increase in employment, has eluded India. What might be holding the sector back? Using Annual Survey of Industries data at the three-digit level and difference in estimates this paper finds that the post-reform performance of the manufacturing sector is heterogeneous across industries. In particular, industries dependent on infrastructure or external finance, and labour-intensive industries have not been able to reap the maximum benefits of reforms. The results point to the importance of infrastructure development and financial sector development for the manufacturing sectors growth to accelerate further. They also emphasize the need to clearly identify and address the factors inhibiting the growth of labour-intensive industries.De-licensing, external finance dependence, infrastructure intensity, labour intensity, manufacturing, Reforms

Trade Reforms, Labor Regulations and Labor-Demand Elasticities: Empirical Evidence from India

This paper finds a positive impact of trade liberalization on labor-demand elasticities in the Indian manufacturing sector using industry-level data disaggregated by states. These elasticities turn out to be negatively related to protection levels that vary across industries and over time. Furthermore, we find that these elasticities are higher for Indian states with flexible labor regulations where they are also impacted more by trade reforms. Finally, we find that after the reforms, volatility in productivity and output gets translated into larger wage and employment volatility, theoretically a possible consequence of larger labor-demand elasticities.

The Impact of Imported and Domestic Technologies on Productivity: Evidence from Indian Manufacturing Firms

Proponents of trade liberalization in developing countries often argue that one of is most important benefits is that is enables firms in developing countries to access the international knowledge base by importing technology in both disembodied form (i.e. as technological know-how) as well as embodied form (i.e. embodied in imported capital goods). Opponents of trade liberalization argue otherwise. In addition to doubting that there are significant gains to be had from utilizing foreign technologies in developing country contexts, they believe that imports of technology dampen local efforts at developing new technology with negative consequences for local capabilities and long-run growth prospects. This paper utilizes panel data on a sample of Indian manufacturing firms for the years 1977-87 to examine these views. Production function estimates reveal that imported technologies, especially those of disembodied nature and obtained through contractual arrangements with foreign firms, impact productivity positively and significantly. Firms own R&D efforts, on the other hand, are note very productive. Finally, while domestically produced capital goods impact productivity positively and significantly, their impact appears to stem from the technological know-how imported by domestic producers of capital goods. Although these findings support the optimism of liberalizers that foreign technologies represent an important opportunity for productivity enhancement for developing country firms, the estimates of this paper also lend support to the notion that a liberal import policy will dampen local efforts at developing new technologies. More specifically, the estimate several that firms do not need to undertake significant R&D efforts to utilize imported technologies effectively. Thus, taken together their results suggest that while firms in India's recently liberalized economic environment will be able to raise their productivity by importing greater amounts of foreign technologies, they will also have less incentives to carry out their own R&D. To the extent that local efforts at R&D are a "good" to be encouraged, the challenge for public policy will be to devise policy tools that are able to boost local R&D, but not through a trade policy which blocks an important and direct channel by which firms can raise productivity.

Effects of Trade and Services Liberalization on Wage Inequality in India

We examine the effects of trade and services liberalization on wage inequality in India. We find that labor reallocations and wage shifts attributable to liberalization account for at most 29% of the increase in inequality between 1993 and 2004, and that effects of services reforms are many times larger than those of trade liberalization. In contrast, 30%–66% of the increase in wage inequality is due to changes in industry wages and skill premiums that cannot be empirically linked to liberalization. These results suggest that if liberalization did, in fact, contribute significantly to increased inequality, the bulk of its effects do not linger in inter- industry wage and skill premiums but are subsumed by general equilibrium effects. Studies of the liberalization–inequality relationship that focus on differences in employment and wage outcomes across industries, or on tradable goods alone, may therefore only be exploring the tip of the iceberg