Why Do People Dislike Low-Wage Trade Competition with Posted Workers in the Service Sector?

32 Pages Posted: 19 Jun 2012

See all articles by Lars Calmfors

Lars Calmfors

Research Institute of Industrial Economics; IIES

Girts Dimdins

affiliation not provided to SSRN

Marie A. Gustafsson

affiliation not provided to SSRN

Henry Montgomery

University of Gothenburg - Department of Psychology

Ulrika Stavlot

affiliation not provided to SSRN

Date Written: June 19, 2012

Abstract

The issue of low-wage competition in services trade involving posted workers is controversial in the EU. Using Swedish survey data, people’s attitudes are found to be more negative to such trade than to goods trade. The differences depend on both a preference for favouring social groups to which individuals belong (here the domestic population) and altruistic justice concerns for foreign workers. In small-group experiments we find a tendency for people to adjust their evaluations of various aspects of trade to their general attitude. This tendency is stronger for those opposed to than those in favour of low-wage trade competition. This may indicate that the former group forms its attitudes in a less rational way than the latter group.

Keywords: services trade, posted workers, wage regulations, attitude formation

JEL Classification: F160, D010

Suggested Citation

Calmfors, Lars and Dimdins, Girts and Gustafsson, Marie A. and Montgomery, Henry and Stavlot, Ulrika, Why Do People Dislike Low-Wage Trade Competition with Posted Workers in the Service Sector? (June 19, 2012). CESifo Working Paper Series No. 3842, Available at SSRN: https://ssrn.com/abstract=2087565

Lars Calmfors (Contact Author)

Research Institute of Industrial Economics ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden
+46761355814 (Phone)

IIES ( email )

Stockholm, SE-10691
Sweden
+468163076 (Phone)

Girts Dimdins

affiliation not provided to SSRN ( email )

Marie A. Gustafsson

affiliation not provided to SSRN ( email )

Henry Montgomery

University of Gothenburg - Department of Psychology ( email )

P.O. Box 500
Göteborg, 40530
Sweden

Ulrika Stavlot

affiliation not provided to SSRN ( email )

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
34
Abstract Views
323
PlumX Metrics