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

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Author Info

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

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    File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2012/wp-cesifo-2012-06/cesifo1_wp3842.pdf
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    Bibliographic Info

    Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3842.

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    Date of creation: 2012
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    Handle: RePEc:ces:ceswps:_3842

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    Related research

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

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    1. Breinlich, Holger & Criscuolo, Chiara, 2011. "International trade in services: A portrait of importers and exporters," Journal of International Economics, Elsevier, vol. 84(2), pages 188-206, July.
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