Exploring the effects of different export sectors on income inequality in developing countries

The purpose of this study is to provide an in depth look at how trade, specifically exports from developing countries, is related to the income inequality in developing countries. This study is different from previous research in that it provides a detailed analysis of how the agricultural, mining and manufactures export sectors in developing countries affect the levels of income inequality in these countries. I conduct an empirical study using a cross-section time-series regression analysis on the relationship between trade openness and export sector to the levels of income inequality in 106 non-OECD countries in the world from 1980 to 2000. The results show that the export of agricultural and raw materials from developing countries increases the levels of income inequality that they experience. The export of certain semi-manufactured goods such as textiles decrease income inequality, while other finished goods like clothing increase the levels of income inequality in developing countries. The main implication of this study is that different export sectors in developing countries have different effects on income inequality depending on the which factors of production benefit from the trade of those goods in the international economy.