IDEAS home Printed from https://ideas.repec.org/a/bla/ecopol/v30y2018i3p444-450.html
   My bibliography  Save this article

Does protectionism harm unskilled workers?

Author

Listed:
  • Hamid Beladi
  • Sugata Marjit
  • Reza Oladi

Abstract

In this paper we construct a general equilibrium model of trade and illustrate that return to unskilled labor may be negatively correlated with the price of product it produces. Specifically, we show that greater protection for the intermediate good that uses “unskilled” labor can reduce the unskilled wages. This result has interesting political‐economic implications.

Suggested Citation

  • Hamid Beladi & Sugata Marjit & Reza Oladi, 2018. "Does protectionism harm unskilled workers?," Economics and Politics, Wiley Blackwell, vol. 30(3), pages 444-450, November.
    • Handle: RePEc:bla:ecopol:v:30:y:2018:i:3:p:444-450
    DOI: 10.1111/ecpo.12118
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/ecpo.12118
    Download Restriction: no
    File URL: https://libkey.io/10.1111/ecpo.12118?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Hamid Beladi & Sugata Marjit & Reza Oladi, 2006. "Uniform Technical Progress: Can It Be Harmful?," Pacific Economic Review, Wiley Blackwell, vol. 11(1), pages 33-38, February.
    2. Gordon H. Hanson & Ann Harrison, 2022. "Trade Liberalization And Wage Inequality In Mexico," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 3, pages 43-60, World Scientific Publishing Co. Pte. Ltd..
    3. Beladi, Hamid & Oladi, Reza, 2011. "An elementary proposition on technical progress and non-traded goods," Journal of Mathematical Economics, Elsevier, vol. 47(1), pages 68-71, January.
    4. Hillman, Arye L, 1982. "Declining Industries and Political-Support Protectionist Motives," American Economic Review, American Economic Association, vol. 72(5), pages 1180-1187, December.
    5. Chaudhuri, Sarbajit & Yabuuchi, Shigemi, 2007. "Economic liberalization and wage inequality in the presence of labour market imperfection," International Review of Economics & Finance, Elsevier, vol. 16(4), pages 592-603.
    6. Marjit, Sugata & Kabiraj, Tarun, 1993. "Income distribution and the contractionary effect of protection : A theoretical analysis," Economics Letters, Elsevier, vol. 41(4), pages 399-405.
    7. Avik Chakrabarti, 2006. "Factor price equalization beyond a “cubic” world," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 27(2), pages 483-491, January.
    8. Hamid Beladi & Sugata Marjit, 1992. "Foreign Capital and Protectionism," Canadian Journal of Economics, Canadian Economics Association, vol. 25(1), pages 233-238, February.
    9. Oladi, Reza & Beladi, Hamid, 2009. "Market interconnection and wages," Economics Letters, Elsevier, vol. 105(1), pages 117-119, October.
    10. James Harrigan, 2000. "International Trade and American Wages in General Equilibrium, 1967-1995," NBER Chapters, in: The Impact of International Trade on Wages, pages 171-196, National Bureau of Economic Research, Inc.
    11. Deardorff, Alan V., 2005. "Ricardian comparative advantage with intermediate inputs," The North American Journal of Economics and Finance, Elsevier, vol. 16(1), pages 11-34, March.
    12. Reza Oladi, 2005. "Stable Tariffs and Retaliations," Review of International Economics, Wiley Blackwell, vol. 13(2), pages 205-215, May.
    13. Ronald W. Jones, 2018. "The Structure of Simple General Equilibrium Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 4, pages 61-84, World Scientific Publishing Co. Pte. Ltd..
    14. Krugman, Paul R., 2000. "Technology, trade and factor prices," Journal of International Economics, Elsevier, vol. 50(1), pages 51-71, February.
    15. Jones, Ronald W, 1974. "Trade with Non-traded Goods: The Anatomy of Inter-connected Markets," Economica, London School of Economics and Political Science, vol. 41(162), pages 121-138, May.
    16. Janet Currie & Ann Harrison, 2022. "Sharing the Costs: The Impact of Trade Reform on Capital and Labor in Morocco," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 2, pages 15-42, World Scientific Publishing Co. Pte. Ltd..
    17. Chao, Chi-Chur & Hu, Shih-Wen & Lai, Ching-Chong & Tai, Meng-Yi & Wang, Vey, 2013. "Tariff-tax reform and exchange rate dynamics in a monetary economy," The North American Journal of Economics and Finance, Elsevier, vol. 24(C), pages 63-73.
    18. Saha, Sarani & Roy, Poulomi & Kar, Saibal, 2014. "Public and private sector jobs, unreported income and consumption gap in India: Evidence from micro-data," The North American Journal of Economics and Finance, Elsevier, vol. 29(C), pages 285-300.
    19. Jones, Ronald W & Engerman, Stanley L, 1996. "Trade, Technology, and Wages: A Tale of Two Countries," American Economic Review, American Economic Association, vol. 86(2), pages 35-40, May.
    20. Reza Oladi & Hamid Beladi, 2008. "Non-traded Goods, Technical Progress and Wages," Open Economies Review, Springer, vol. 19(4), pages 507-515, September.
    21. Marjit, Sugata & Kar, Saibal & Hazari, Bharat R., 2013. "Emigration, unemployment and welfare – The role of non-traded sector," The North American Journal of Economics and Finance, Elsevier, vol. 24(C), pages 298-305.
    22. Sugata Marjit & Hamid Beladi & Avik Chakrabarti, 2004. "Trade and Wage Inequality in Developing Countries," Economic Inquiry, Western Economic Association International, vol. 42(2), pages 295-303, April.
    23. Batabyal, Amitrajeet A., 2012. "Project financing, entrepreneurial activity, and investment in the presence of asymmetric information," The North American Journal of Economics and Finance, Elsevier, vol. 23(1), pages 115-122.
    24. Harrison, Ann & Hanson, Gordon, 1999. "Who gains from trade reform? Some remaining puzzles," Journal of Development Economics, Elsevier, vol. 59(1), pages 125-154, June.
    25. Jones, Ronald W, 1971. "Distortions in Factor Markets and the General Equilibrium Model of Production," Journal of Political Economy, University of Chicago Press, vol. 79(3), pages 437-459, May-June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sugata Marjit & Manoj Pant & Sugandha Huria, 2020. "Unskilled immigration, technical progress, and wages—Role of the household sector," Review of International Economics, Wiley Blackwell, vol. 28(1), pages 235-251, February.
    2. John Gilbert & Onur A. Koska & Reza Oladi, 2022. "Labor‐eliminating technology, wage inequality, and trade protectionism," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(6), pages 1249-1265, December.
    3. Thompson, Alexi & Thompson, Henry, 2021. "The imputed effect of US tariffs on wages," International Review of Economics & Finance, Elsevier, vol. 72(C), pages 191-197.
    4. Leonard F. S. Wang & Ji Sun, 2023. "Corporate profit tax, firm entry with unemployment, and income inequality," Bulletin of Economic Research, Wiley Blackwell, vol. 75(2), pages 380-392, April.
    5. Pi Jiancai & Zhao Runzhi, 2020. "Corporate Social Responsibility and Wage Inequality," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 20(3), pages 1-16, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chaudhuri, Sarbajit & Mukhopadhyay, Ujjaini, 2009. "Revisiting the Informal Sector: A General Equilibrium Approach," MPRA Paper 52135, University Library of Munich, Germany.
    2. Gupta, Manash Ranjan & Dutta, Priya Brata, 2010. "Skilled-unskilled wage inequality, nontraded good and endogenous supply of skilled labour: A theoretical analysis," Economic Modelling, Elsevier, vol. 27(5), pages 923-934, September.
    3. Jiancai Pi & Xiangyu Huang, 2021. "Product Variety and Wage Inequality," Annals of Economics and Finance, Society for AEF, vol. 22(1), pages 135-151, May.
    4. Chaudhuri, Sarbajit & Yabuuchi, Shigemi, 2007. "Foreign Capital and Skilled-unskilled Wage Inequality in a Developing Economy with Non-traded Goods," MPRA Paper 2645, University Library of Munich, Germany.
    5. Gupta, Manash Ranjan & Dutta, Priya Brata, 2010. "Skilled-unskilled wage inequality: A general equilibrium analysis," Research in Economics, Elsevier, vol. 64(4), pages 247-263, December.
    6. Chaudhuri, Sarbajit, 2008. "Fair Wage Hypothesis, Foreign Capital Inflow and Skilled-unskilled Wage Inequality in the Presence of Agricultural Dualism," MPRA Paper 9394, University Library of Munich, Germany.
    7. Manash Ranjan Gupta & Priya Brata Dutta, 2018. "Skilled-unskilled wage inequality and structural transformation in a dual economy," Indian Economic Review, Springer, vol. 53(1), pages 311-332, December.
    8. Robbins, Donald J., 2003. "The impact of trade liberalization upon inequality in developing countries : a review of theory and evidence," ILO Working Papers 993650553402676, International Labour Organization.
    9. Sugata Marjit & Suryaprakash Mishra & Sandip Sarkar & Lei Yang, 2019. "Trade, Inequality and Distribution-neutral Fiscal Policy," Foreign Trade Review, , vol. 54(2), pages 61-74, May.
    10. Pi, Jiancai & Zhang, Pengqing, 2018. "Skill-biased technological change and wage inequality in developing countries," International Review of Economics & Finance, Elsevier, vol. 56(C), pages 347-362.
    11. Grabiella Berloffa & Maria Luigia Segnana, 2004. "Trade, inequality and pro-poor growth: Two perspectives, one message?," Department of Economics Working Papers 0408, Department of Economics, University of Trento, Italia.
    12. Jorge Saba Arbache, 2001. "Trade Liberalisation and Labor Markets in Developing Countries: Theory and Evidence," Studies in Economics 0112, School of Economics, University of Kent.
    13. Priya Brata Dutta, 2014. "Skilled-unskilled wage inequality, product variety and unemployment: A static general equilibrium analysis," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 23(1), pages 31-55, February.
    14. Oladi, Reza & Beladi, Hamid, 2009. "Market interconnection and wages," Economics Letters, Elsevier, vol. 105(1), pages 117-119, October.
    15. Gupta, Manash Ranjan & Dutta, Priya Brata, 2012. "Skilled–unskilled wage inequality, product variety, public input and increasing returns: A static general equilibrium analysis," Economic Modelling, Elsevier, vol. 29(2), pages 502-513.
    16. Ravi Batra & Hamid Beladi & Reza Oladi, 2013. "Technical Progress and Real Wages Once again," Review of International Economics, Wiley Blackwell, vol. 21(3), pages 506-518, August.
    17. Mandal, Biswajit & Roy, Sangita, 2016. "Trade liberalization and wage distribution when skilled intermediate input is used in import competing sector that uses a commom type of capital," MPRA Paper 87460, University Library of Munich, Germany.
    18. Gupta, Manash Ranjan & Dutta, Priya Brata, 2011. "Skilled-unskilled wage inequality and unemployment: A general equilibrium analysis," Economic Modelling, Elsevier, vol. 28(4), pages 1977-1983, July.
    19. Chaudhuri, Sarbajit & Banerjee, Dibyendu, 2010. "Foreign capital inflow, skilled-unskilled wage inequality and unemployment of unskilled labour in a fair wage model," Economic Modelling, Elsevier, vol. 27(1), pages 477-486, January.
    20. Mandal, Biswajit & Roy, Sangita, 2017. "Trade liberalization, Skilled Intermediate input and Wage Distribution," MPRA Paper 87459, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecopol:v:30:y:2018:i:3:p:444-450. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0954-1985 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.