Author: | Rowthorn, R. Kozul-Wright, R. Akyuz, Y. |
Title: | Adapting to North-South Trade: A General Equilibrium Approach to Policy Options |
Journal: | Oxford Economic Papers
1997 : OCT, Vol. 49:4, p. 483-503 |
Index terms: | NEW INTERNATIONAL ECONOMIC ORDER INTERNATIONAL TRADE EQUILIBRIUM ANALYSIS |
Language: | eng |
Abstract: | This paper develops a general equilibrium model of North-South trade with different wage setting regimes and a non-tradeables sector. Simulations confirm that substantial gains from trade openness can be accompanied by a significant deterioration in the position of unskilled Northern workers. Increasing labour market flexibility will not correct this problem and protectionist measures, such as enforcing labour standards on the South, will reduce global income. Less conventional labour market policies, such as employment subsidies for unskilled workers, offer a more effective response, and one, moreover, which benefits workers in both the North and South. |
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