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GTAP Resource #3363

"The Economic and Poverty Impacts of Trade Liberalization in Senegal"
by Cockburn, John, Bernard Decaluwe, Erwin Corong, Ismael Fofana and Veronique Robichaud

Senegal is engaged in the process of liberalizing its external trade under various trade negotiations. At the same time, female participation in the labor market has increased significantly over the last decade. Studies show that the feminization of work is greater in industrial sectors and in semi-industrialized economies, where export industries, such as garments and light manufacturing, employ more women than in agricultural sectors and economies. In semi-industrial economies, liberalization reduces the overall gap between men and women in terms of wage rates, labor market participation and income distribution. In contrast, in agricultural economies – and in agricultural sectors in (semi-) industrial economies – trade is found to favor men, as they are more likely to be engaged in the production of cash crops for export while women focus on import-competing food crops.
Most CGE empirical studies find relatively small welfare and poverty impacts of trade liberalization. These results are not very surprising as in a static framework, which is generally used, welfare gains and poverty impacts result solely from a reallocation of resources. However, there is strong evidence that openness to international trade creates a more competitive environment, and stimulates the diffusion of new technologies, innovation, the adoption of new methods of production and an increase in the availability of imported inputs. It is also argued that in the presence of firm heterogeneity, increased trade leads to a rationalization of output toward the most productive firms.
We contribute to this literature by integrating the growth effects of trade liberalization and the resulting long-run impacts on welfare and poverty. In other words, the question we are trying to answer is, if such productivity gains occur as a result of trade liberalization, who would benefit the most from it.

Resource Details (Export Citation) GTAP Keywords
Category: 2010 Conference Paper
Status: Published
By/In: Presented at the 13th Annual Conference on Global Economic Analysis, Penang, Malaysia
Date: 2010
Created: Robichaud, V. (4/15/2010)
Updated: Robichaud, V. (4/15/2010)
Visits: 2,042
- Economic growth
- Economic analysis of poverty
- Dynamic modeling
- Africa (West)

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