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Effect of International Trade and Labor Mobility on Income Distribution in Thailand: An Application of Non-Linear Distributed Lag Model

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Chavis Ketkaew

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This research paper analyzes the impact of international trade and labor mobility on income distribution, using Thailand as a case study. In particular, the study tries to identify the econometric relationship between the Gini Index and lagged economic variables representing the degree of trade openness and labor mobility. The study used time series data and employed non-linear distributed lag multiple regression as a model to represent the relationship among variables. The signifiance of each factor was then tested using the Lagrange Multiplier Test (LM test). The results yielded from covariance analysis suggested that, in the long run, there exists a negative relationship between the Gini Index and exports, employment in the agricultural sector, and employment in the service sector. On the flp side, covariance analysis revealed a positive relationship between the Gini Index and imports and tariff rate.

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International Trade; Labor Mobility; Gini Index; Income Distribution; Lagrange Multiplier Test; Distributed Lag Model