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Globalization and Poverty$
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Ann Harrison

Print publication date: 2007

Print ISBN-13: 9780226317946

Published to Chicago Scholarship Online: February 2013

DOI: 10.7208/chicago/9780226318004.001.0001

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The Effects of the Colombian Trade Liberalization on Urban Poverty

The Effects of the Colombian Trade Liberalization on Urban Poverty

(p.241) 6. The Effects of the Colombian Trade Liberalization on Urban Poverty
Globalization and Poverty

Pinelopi Koujianou Goldberg

Nina Pavcnik

University of Chicago Press

This chapter examines the impact of a large reduction in average tariffs in Colombia between 1984 and 1998 on a variety of urban labor market outcomes: the probability of becoming unemployed, minimum wage compliance, informal-sector employment, and the incidence of poverty. The Colombian trade reforms indicate that the cross-sectional variation in tariff changes provides an appealing policy experiment to study how trade policy changes have affected the Colombian economy. Poverty in urban Colombia is highly correlated with unemployment. The chapter shows that the trade policy affected the probability of becoming unemployed. The poverty reduction observed between 1986 and 1994 cannot be attributed to trade-policy-induced changes in informality or to minimum wage compliance. Thus, the descriptive results establish that poverty in urban areas is highly linked with unemployment, employment in the informal sector, and noncompliance with minimum wages.

Keywords:   tariffs, Colombia, urban labor market, minimum wage compliance, poverty, Colombian trade reforms, Colombian economy, unemployment, informal-sector employment

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