{"id":119174,"date":"2024-01-22T22:22:11","date_gmt":"2024-01-22T21:22:11","guid":{"rendered":"https:\/\/www.wifo.ac.at\/publication\/119174\/"},"modified":"2024-11-07T05:02:49","modified_gmt":"2024-11-07T04:02:49","slug":"smoothing-the-adjustment-to-trade-liberalisation-wwwforeurope-working-paper-no-61","status":"publish","type":"publication","link":"https:\/\/www.wifo.ac.at\/en\/publication\/119174\/","title":{"rendered":"Smoothing the Adjustment to Trade Liberalisation. WWWforEurope Working Paper No. 61"},"content":{"rendered":"","protected":false},"featured_media":0,"template":"","class_list":["post-119174","publication","type-publication","status-publish","hentry"],"acf":{"subtitle":"","text":"We use a dynamic general equilibrium trade model with comparative advantage, heterogeneous firms, heterogeneous workers and endogenous firm entry to analyse economic policy to compensate the losers of trade liberalisation and to reduce the ensuing wage inequality. We consider several instruments of economic policy: a wage tax to redistribute income between skilled and unskilled workers; sector-specific consumption taxes and profit taxes to affect inter-sectoral wage inequality; sector-specific firm entry subsidies, worker sector-migration subsidies and training subsidies to speed up the adjustment process. We find that the re-distributional and efficiency effects of these instruments differ very much. Probably the most potent tool to reduce the wage inequality after trade liberalisation is training subsidies. Although the policy also generates inefficiencies because too many workers are trained, the costs of these inefficiencies are relatively low.","onlinedate":"2014-05-28 12:00:00","lang":"English","publication_series":"WWWforEurope: Welfare, Wealth and Work for Europe","publication_date":"20140501","publication_date_year":"","publication_date_full":false,"publication_num_pages":"54","keywords":"[]","jelcodes":"[]","related_publications":"[]","pdf":353079,"zip":null,"link":"","monthly_report":false,"monthly_report_main":false,"monthly_report_volume":"","monthly_report_pages":"","monthly_report_pages_sort":"0","issue":"","journal":"","publisher":"","invisible":false,"external":false,"embargo_date":"2014-05-28 12:00:00","types":[81966],"research_groups":[3510],"collaboration":"","persons":[14915,12475],"persons_data":"[{\"personId\":14915,\"personName\":\"Wolfgang Lechthaler\",\"organisationNames\":[]},{\"personId\":12475,\"personName\":\"Mariya Mileva\",\"organisationNames\":[\"IfW\"]}]","clients":[10692,10704,10722,32851],"subclients":[],"partners":[],"topics":[],"host_publication_title":"","host_publication_subtitle":"","place_of_publication":"","host_publication_editors":"[]","type_description":"","output_media":"","chapter":"","article_number":"","citations":"{\"apa\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_apa rendering_bookanthology rendering_apa rendering_bookanthology_apa\\\">Lechthaler, W., &amp; Mileva, M. (2014). <span><em>Smoothing the Adjustment to Trade Liberalisation. WWWforEurope Working Paper No. 61<\\\/em><\\\/span>. (WWWforEurope: Welfare, Wealth and Work for Europe). Kiel Institute for the World Economy. <a onclick=\\\"window.open(this.href, '_blank','noopener,noreferrer'); return false;\\\" href=\\\"https:\\\/\\\/www.wifo.ac.at\\\/wwa\\\/pubid\\\/47248\\\" class=\\\"link\\\"><span>https:\\\/\\\/www.wifo.ac.at\\\/wwa\\\/pubid\\\/47248<\\\/span><\\\/a><\\\/div>\",\"vancouver\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_vancouver rendering_bookanthology rendering_vancouver rendering_bookanthology_vancouver\\\">Lechthaler W, Mileva M. <span class=\\\"title\\\"><span>Smoothing the Adjustment to Trade Liberalisation. WWWforEurope Working Paper No. 61<\\\/span><\\\/span>. Kiel Institute for the World Economy; 2014.<\\\/div>\",\"bibtex\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_bibtex rendering_bookanthology rendering_bibtex rendering_bookanthology_bibtex\\\"><div>@book{5f2ef8c0e06847c0a5650009ce4705bf,<\\\/div><div>  title     = \\\"Smoothing the Adjustment to Trade Liberalisation. WWWforEurope Working Paper No. 61\\\",<\\\/div><div>  abstract  = \\\"We use a dynamic general equilibrium trade model with comparative advantage, heterogeneous firms, heterogeneous workers and endogenous firm entry to analyse economic policy to compensate the losers of trade liberalisation and to reduce the ensuing wage inequality. We consider several instruments of economic policy: a wage tax to redistribute income between skilled and unskilled workers; sector-specific consumption taxes and profit taxes to affect inter-sectoral wage inequality; sector-specific firm entry subsidies, worker sector-migration subsidies and training subsidies to speed up the adjustment process. We find that the re-distributional and efficiency effects of these instruments differ very much. Probably the most potent tool to reduce the wage inequality after trade liberalisation is training subsidies. Although the policy also generates inefficiencies because too many workers are trained, the costs of these inefficiencies are relatively low.\\\",<\\\/div><div>  author    = \\\"Wolfgang Lechthaler and Mariya Mileva\\\",<\\\/div><div>  note      = \\\"Smoothing the Adjustment to Trade Liberalisation\\\",<\\\/div><div>  year      = \\\"2014\\\",<\\\/div><div>  month     = may,<\\\/div><div>  language  = \\\"English\\\",<\\\/div><div>  series    = \\\"WWWforEurope: Welfare, Wealth and Work for Europe\\\",<\\\/div><p>}<\\\/p><\\\/div>\",\"ris\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_ris rendering_bookanthology rendering_ris rendering_bookanthology_ris\\\"><p>TY  - BOOK<\\\/p><p>T1  - Smoothing the Adjustment to Trade Liberalisation. WWWforEurope Working Paper No. 61<\\\/p><p>AU  - Lechthaler, Wolfgang<\\\/p><p>AU  - Mileva, Mariya<\\\/p><p>N1  - Smoothing the Adjustment to Trade Liberalisation<\\\/p><p>PY  - 2014\\\/5<\\\/p><p>Y1  - 2014\\\/5<\\\/p><p>N2  - We use a dynamic general equilibrium trade model with comparative advantage, heterogeneous firms, heterogeneous workers and endogenous firm entry to analyse economic policy to compensate the losers of trade liberalisation and to reduce the ensuing wage inequality. We consider several instruments of economic policy: a wage tax to redistribute income between skilled and unskilled workers; sector-specific consumption taxes and profit taxes to affect inter-sectoral wage inequality; sector-specific firm entry subsidies, worker sector-migration subsidies and training subsidies to speed up the adjustment process. We find that the re-distributional and efficiency effects of these instruments differ very much. Probably the most potent tool to reduce the wage inequality after trade liberalisation is training subsidies. Although the policy also generates inefficiencies because too many workers are trained, the costs of these inefficiencies are relatively low.<\\\/p><p>AB  - We use a dynamic general equilibrium trade model with comparative advantage, heterogeneous firms, heterogeneous workers and endogenous firm entry to analyse economic policy to compensate the losers of trade liberalisation and to reduce the ensuing wage inequality. We consider several instruments of economic policy: a wage tax to redistribute income between skilled and unskilled workers; sector-specific consumption taxes and profit taxes to affect inter-sectoral wage inequality; sector-specific firm entry subsidies, worker sector-migration subsidies and training subsidies to speed up the adjustment process. We find that the re-distributional and efficiency effects of these instruments differ very much. Probably the most potent tool to reduce the wage inequality after trade liberalisation is training subsidies. Although the policy also generates inefficiencies because too many workers are trained, the costs of these inefficiencies are relatively low.<\\\/p><p>M3  - Study<\\\/p><p>T3  - WWWforEurope: Welfare, Wealth and Work for Europe<\\\/p><p>BT  - Smoothing the Adjustment to Trade Liberalisation. WWWforEurope Working Paper No. 61<\\\/p><p>ER  - <\\\/p><\\\/div>\"}","scientific_assistance":"[]","scientific_review":"[]","version":"","release_date":null,"expiration_date":null,"surveyor":"","research_assistance":"","edv":"","additional_info_de":"","additional_info_en":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.0 (Yoast SEO v28.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Smoothing the Adjustment to Trade Liberalisation. 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