Trade Policy, Income Risk, and Welfare
52 Pages Posted: 23 May 2005
There are 3 versions of this paper
Trade Policy, Income Risk, and Welfare
Trade Policy, Income Risk, and Welfare
Date Written: April 2005
Abstract
This paper studies empirically the relationship between trade policy and individual income risk faced by workers, and uses the estimates of this empirical analysis to evaluate the welfare effect of trade reform. The analysis proceeds in three steps. First, longitudinal data on workers are used to estimate time-varying individual income risk parameters in various manufacturing sectors. Second, the estimated income risk parameters and data on trade barriers are used to analyze the relationship between trade policy and income risk. Finally, a simple dynamic incomplete-market model is used to assess the corresponding welfare costs. In the implementation of this methodology using Mexican data, we find that trade policy changes have a significant short run effect on income risk. Further, while the tariff level has an insignificant mean effect, it nevertheless changes the degree to which macroeconomic shocks affect income risk.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Income Risk, Income Mobility and Welfare
By Tom Krebs, Pravin Krishna, ...
-
Income Risk, Income Mobility and Welfare
By Tom Krebs, Pravin Krishna, ...
-
Income Risk, Income Mobility and Welfare
By Tom Krebs, Pravin Krishna, ...
-
Trade Policy, Income Risk, and Welfare
By Tom Krebs, Pravin Krishna, ...
-
Trade Policy, Income Risk, and Welfare
By Tom Krebs, Pravin Krishna, ...
-
Estimating Individual Vulnerability to Poverty with Pseudo-Panel Data
By Francois Bourguignon, Chor-ching Goh, ...
-
Labour Markets in EMU - What Has Changed and What Needs to Change
-
The Risk Content of Exports: A Portfolio View of International Trade