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Why do people dislike low-wage trade competition with posted workers in the service sector?

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  • Calmfors, Lars
  • Dimdins, Girts
  • Sendén, Marie Gustafsson
  • Montgomery, Henry
  • Stavlöt, Ulrika
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    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 (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.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).

    Volume (Year): 47 (2013)
    Issue (Month): C ()
    Pages: 82-93

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    Handle: RePEc:eee:soceco:v:47:y:2013:i:c:p:82-93

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    Web page: http://www.elsevier.com/locate/inca/620175

    Related research

    Keywords: Services trade; Posted workers; Wage regulations; Attitude formation;

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    References

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    1. Mayda, Anna Maria, 2008. "Why are people more pro-trade than pro-migration?," Economics Letters, Elsevier, vol. 101(3), pages 160-163, December.
    2. Kenneth F. Scheve & Matthew J. Slaughter, 1998. "What Determines Individual Trade Policy Preferences?," NBER Working Papers 6531, National Bureau of Economic Research, Inc.
    3. Mayda, Anna Maria, 2004. "Who Is Against Immigration? A Cross-Country Investigation of Individual Attitudes toward Immigrants," IZA Discussion Papers 1115, Institute for the Study of Labor (IZA).
    4. Kristen Olson, 2013. "Do non-response follow-ups improve or reduce data quality?: a review of the existing literature," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 176(1), pages 129-145, 01.
    5. Mayda, Anna Maria & Rodrik, Dani, 2005. "Why are some people (and countries) more protectionist than others?," European Economic Review, Elsevier, vol. 49(6), pages 1393-1430, August.
    6. Francois, Joseph & Hoekman, Bernard, 2009. "Services Trade and Policy," CEPR Discussion Papers 7616, C.E.P.R. Discussion Papers.
    7. Breinlich, Holger & Criscuolo, Chiara, 2010. "International Trade in Services: A Portrait of Importers and Exporters," CEPR Discussion Papers 7837, C.E.P.R. Discussion Papers.
    8. Lori G. Kletzer, 2004. "Trade-related Job Loss and Wage Insurance: a Synthetic Review," Review of International Economics, Wiley Blackwell, vol. 12(5), pages 724-748, November.
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