Trade Reform, Labour Training and the Skilled Ability: A Theoretical Analysis

Titas Kumar Bandopadhyay


The main purpose of the paper is to examine the effects of trade reform on the skill structure of the urban formal and the informal sectors. Two types of trade reforms are considered here: reduction in tariff and reduction in export subsidy. This paper shows that a tariff reduction raises skilled ability for the informal sector and lowers that for the urban formal sector. However, reduction in export subsidy gives opposite results.This may explain the changing structure of the labour force in the urban formal and the informal sectors in the post reform period which is observed in many countries.


trade reform, labour training, skilled ability

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