Is Tunisian Trade Policy Pro-Poor?

Tunisia - 26 May 2016

The main aim of this paper is to investigate the effects of Tunisian trade policy on household welfare. We use the recently released household survey data in combination with estimated tariff pass-through elasticities and wage elasticities obtained from Mincerian equations. Changes in tariffs affect both local prices and wages and those changes are transmitted into changes in household expenditure. Using the methodology proposed by Porto (2006), the main results show that the changes in household welfare are positive and have a greater effect for the lower quantiles of the expenditure distribution. This result is largely explained by the fact that the decrease in consumer goods prices benefits poor more than rich households, while labor income effects are close to zero.

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