TY  - JOUR
AU  - Chari,Anusha
AU  - Henry,Peter Blair
AU  - Sasson,Diego
TI  - Capital Market Integration and Wages
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15204
PY  - 2009
Y2  - August 2009
UR  - http://www.nber.org/papers/w15204
L1  - http://www.nber.org/papers/w15204.pdf
N1  - Author contact info:
Anusha Chari
301 Gardner Hall
CB#3305, Department of Economics
University of North Carolina at Chapel Hill
Chapel Hill, NC 27599
Tel: 919/966-5346
E-Mail: achari@unc.edu

Peter Blair Henry
Stern School of Business
New York University
44 West 4th Street, 11-58
New York, NY 10012
Tel: 212/998-0909
E-Mail: pbhenry@stern.nyu.edu

Diego Sasson
Stanford University
E-Mail: dsasson@stanford.edu
AB  - For three years after the typical emerging economy opens its stock market to inflows of foreign capital, the average annual growth rate of the real wage in the manufacturing sector increases by a factor of three. No such increase occurs in a control group of countries. The temporary increase in the growth rate of the real wage drives up the level of average annual compensation for each worker in the sample by 487 US dollars—an increase equal to nearly one-fifth of their annual pre-liberalization salary. The increase in the growth rate of labor productivity in the aftermath of liberalization exceeds the increase in the growth rate of the real wage so that the increase in workers’ incomes does not drive up unit labor costs. Overall, the results suggest that trade in capital may have a larger impact on wages than trade in goods.
ER  -