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

contributed to the increase in wage inequalities in Tunisia.

Key-Words: - Trade openness, Wage inequality, employment, Panel data, Tunisia

Received: August 29, 2022. Revised: May 21, 2023. Accepted: June 23, 2023. Published: July 12, 2023.

1 Introduction

As a major force of the 20th century, trade openness

has created a new kind of interactions between

positive spillover effects of trade openness, it is

likely to have some disruptive aspects, which is why

there has been an intense debate between its

supporters and opponents regarding its effects,

distribution of its gains, given the considerable rise

are countries that have implemented a pronounced

liberalization process. Despite a surge in their

growth rates, their openness has gone hand in hand

with a sharp rise in inequalities, affecting primarily

the poorest individuals and placing these countries

at the top of the international rankings concerning

inequalities.

today is how to take advantage of the supposed

gains from trade openness while reducing its effects

wage inequality, in Tunisia, a developing country

that has long suffered from these inequalities.

2 Literature review:

The first thoughts were those of the Heckscher-

Ohlin-Samuelson (HOS) final goods trade model,

between countries with different factor endowments.

By referring to this model, trade opening that leads

to greater specialization should have positive

incidence on developing countries. A more

is unskilled labor begins to open up more to the

international trade, the demand for low-skilled labor

will increase, the wages of these workers will tend

to follow suit. On the other hand, wages for skilled

workers will be lowered, leading to a reduction in

the wage gap.

bring more equality and benefit the poorest

population.

concerned, several empirical studies have

contradicted the HOS model or Stopler-Samuelson

theory predictions. Many of these studies have

concluded that international trade has increased the

demand for skilled labor at the expense of unskilled

labor in these countries.

opening up, developing countries were unable to

redistribute income effectively.

new technologies have contributed to the increase in

demand for skilled labor in the country at the

expense of unskilled ones.

conclusions for Mexico. Indeed, all reforms aimed

at greater openness have resulted in an increase in

the wage gap.

that the wages of less skilled workers fell by about

25 percent, while the wages of skilled ones rose by

10 percent.

focusing on the cases of Ghana and Colombia

inequalities have increased significantly, especially

in countries characterized by a strong deregulation

and external liberalization policy.

on the case of Brazil, were able to show that trade

openness led to a decline in wages of about 16 per

cent in sectors exposed to foreign competition,

while the decline was only 8 per cent in protected

sectors employing mainly skilled workers.

countries that are characterized by relatively low

inequality in the UK was a result of trade openness.

The country has been tempted to import intensive

unskilled labor products from low-wage countries,

which would cost less. However, this has led to a

decline in the demand for unskilled labour within

the country, further fuelling the wage gap.

trade and new technologies as factors that aggravate

wage inequalities.

and that this decrease was felt even more among the

least qualified workers, thus leading to greater wage

inequalities.

of inequality by a certain number of variables such

as openness, FDI, GDP per capita, the

unemployment rate, the inflation rate as well as the

number of national listed companies in the case of

24 OECD countries between 1997 and 2007, came

to the conclusion that trade openness and wage

inequalities were going in two different directions

while, conversely, inflation and unemployment

positively affected inequality.

We will use panel data econometrics to estimate our

model.

This method has the particularity of providing us

with an important source of information, both on the

individual and temporal dimensions of the studied

subjects (Trognon 2003).

The use of this technique relies on primordial tests

conditions favorable to the development and

3.4 Descriptive statistics:

Table 2 Descriptive statistics

which report indicators of position, dispersion and

form in order to verify empirically the symmetry,

understand the effect of all the variables used on the

wage gap between skilled and unskilled workers,

first at the level of the Tunisian manufacturing

industry, then at the level of the services sector and

finally by taking into account the whole economy

including the non-manufacturing sectors in order to

carry out a comparative study between these

estimate our model in response to the endogeneity

problem associated with the variable representing

labor demand.

number of education years per sector as a proxy.

affects wage differences and inequality through

labor demand.

classify individuals into different categories

various studies issued by the Tunisian Institute of

quality work quite low, the latter has concerned

much more the unskilled workforce. Indeed, as an

example, the percentage of employees with no

higher education degree in the manufacturing

industry has reached 66.6%

of senior technicians and engineers is only 5.3%

with sectors such as textiles, clothing and leather

which employs about 90%

Munshi (2012), who looked at the manufacturing

skilled workers.

the Tunisian economy as a whole or the services

sector. In fact, it is the latter that requires the most

skilled labor and is among the highest paying

sectors.

highly depend on qualifications and the sectors in

question. The observation of incomes shows that the

net salary increases considerably with the higher

educational level, in fact, the net base salary is

almost quadrupled between a non-graduate and a

higher graduated employee. This difference is even

qualified workers, thus contributing to the wage gap

between the two groups of workers. This is largely

related to the technological development bias in

on NSI statistics from employment surveys

This counterintuitive effect is further evidence of

graduates of higher education which reached in

2020 30%

15%.

market is facing a low creation of quality jobs

especially in the manufacturing industry. Jobs that

concern largely unskilled work with an economy

that keeps facing difficulties and a number of jobs

not exceeding 5%

applicants.

standing 119th

still at the bottom of the table at the international

level and the statement is not very bright at the level

of the Arab world where Tunisia is ranked 9th out of

institutional quality is an important factor in

economic performance since the proper functioning

of the market is largely conditioned by the quality of

the institutions. In the context of market activities

involving a large number of agents and institutions,

the role of good governance is to reduce information

asymmetries and the various risks by ensuring that

The 1990s marked a global context where

economies are increasingly integrated and in

constant interaction through the acceleration and