The New Palgrave Dictionary of Economics

Living Edition
| Editors: Palgrave Macmillan

Trade and Poverty

  • Nina Pavcnik
Living reference work entry


This article reviews the relationship between trade and poverty, with specific focus on this link in developing countries. Since the 1980s, our understanding of the link between trade and poverty has been increasingly informed by empirical evidence. We first review the literature that emphasizes the dynamic effects of trade on poverty via growth. We next consider the literature on the static relationship between trade and poverty through changes in relative prices of goods and wages of the less educated. We conclude with a discussion of trade and child labour.


Child labour Foreign direct investment Hecksher–ohlin trade theory Import substitution Labour mobility Mercosur Outsourcing Poverty Poverty alleviation Returns to schooling Skill-biased technical change Stolper–samuelson theorem Trade and poverty Trade liberalization Wage inequality 

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Copyright information

© The Author(s) 2008

Authors and Affiliations

  • Nina Pavcnik
    • 1
  1. 1.