Capital Market Integration and Wages

摘要

For three years after the typical emerging economy opens its stockmarket to inflows of foreign capital, the average annual growth rate ofthe real wage in the manufacturing sector increases by a factor ofthree. No such increase occurs in a control group of countries that donot liberalize. The temporary increase in wage growth drives up thelevel of the average worker's annual compensation by US $487—anincrease equal to nearly one-fifth of their annual pre-liberalizationsalary. Overall, the results suggest that trade in capital may have alarger impact on wages than trade in goods. (JEL E25, E44, F16, F43,G18, O16)