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Who is Afraid of Globalization? The Challenge of Domestic Adjustment in Europe and America

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  • Sapir, André

Abstract

The paper examines why ‘globaphobia’ seems to be more prevalent among labour in the United States than in Europe. It argues that globalization has generated more wealth, but also more income inequality and adjustment problems, in America than in Europe. In the United States, the median voter has lost wages and experienced rising job insecurity due to globalization. By contrast, in Europe, the welfare state has largely insulated the median voter from the pains of globalization. The paper also examines international labour mobility, the grand absentee of the current wave of globalization. Here it finds that phobia runs higher in Europe than in America. It claims that the relative generosity of Europe’s welfare state makes it less open to migration than the United States.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2595.

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Date of creation: Oct 2000
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Handle: RePEc:cpr:ceprdp:2595

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Related research

Keywords: International Migration; Labour Adjustment; Trade Liberalization;

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References

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  1. R. Naylor, 1999. "Endogenous determination of trade regime and bargaining outcome," Working Paper CRENoS 199910, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  2. André Sapir, 2000. "EC Regionalism at the Turn of the Millennium: Toward a New Paridigm?," The World Economy, Wiley Blackwell, vol. 23(9), pages 1135-1148, 09.
  3. Dewatripont, Mathias & Sapir, Andre & Sekkat, Khalid (ed.), 1999. "Trade and Jobs in Europe: Much Ado About Nothing?," OUP Catalogue, Oxford University Press, number 9780198293606, September.
  4. Naylor, Robin, 1999. "Union Wage Strategies and International Trade," Economic Journal, Royal Economic Society, vol. 109(452), pages 102-25, January.
  5. Stephen Nickell, 1997. "Unemployment and Labor Market Rigidities: Europe versus North America," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 55-74, Summer.
  6. William R. Cline, 1997. "Trade and Income Distribution," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 58.
  7. Aaditya Mattoo, 2000. "Developing Countries in the New Round of GATS Negotiations: Towards a Pro-Active Role," The World Economy, Wiley Blackwell, vol. 23(04), pages 471-489, 04.
  8. André Sapir & Mathias Dewatripont & Khalid Sekkat, 1999. "Trade and jobs in Europe: much ado about nothing?," ULB Institutional Repository 2013/8076, ULB -- Universite Libre de Bruxelles.
  9. André Sapir, 1996. "The harmonization of social policies: lessons from European integration," ULB Institutional Repository 2013/8164, ULB -- Universite Libre de Bruxelles.
  10. Razin, A. & Sadka, E., 1998. "Migration and Pension," Papers 16-98, Tel Aviv.
  11. Dani Rodrik, 1997. "Has Globalization Gone Too Far?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 57.
  12. Winter-Ebmer, Rudolf & Zimmermann, Klaus F., 1998. "East-West Trade and Migration: The Austro-German Case," IZA Discussion Papers 2, Institute for the Study of Labor (IZA).
  13. Wellisch, Dietmar & Walz, Uwe, 1998. "Why do rich countries prefer free trade over free migration? The role of the modern welfare state," European Economic Review, Elsevier, vol. 42(8), pages 1595-1612, September.
  14. Rebecca M. Blank, 1994. "Social Protection versus Economic Flexibility: Is There a Trade-Off?," NBER Books, National Bureau of Economic Research, Inc, number blan94-1, July.
  15. World Bank, 2000. "World Development Indicators 2000," World Bank Publications, The World Bank, number 13828, August.
  16. Joseph E. Stiglitz, 2000. "Two Principles for the Next Round or, How to Bring Developing Countries in from the Cold," The World Economy, Wiley Blackwell, vol. 23(04), pages 437-454, 04.
  17. Adrian Wood, 1995. "How Trade Hurt Unskilled Workers," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 57-80, Summer.
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Citations

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Cited by:
  1. Chung, Heejung, 2005. "Different paths towards Flexibility, Deregulated employment protection or temporary employment?," MPRA Paper 2396, University Library of Munich, Germany, revised Oct 2005.
  2. Daniele Checchi & Gianfranco De Simone & Riccardo Faini, 2007. "Skilled Migration, FDI and Human Capital Investment," UNIMI - Research Papers in Economics, Business, and Statistics unimi-1067, Universitá degli Studi di Milano.
  3. Wilfred J. Ethier, 2002. "Globalization, Globalisation," Tinbergen Institute Discussion Papers 02-088/2, Tinbergen Institute.
  4. Thierry Verdier, 2005. "Intégration commerciale « socialement responsable » : une approche en termes d'économie politique," Revue d’économie du développement, De Boeck Université, vol. 19(4), pages 55-121.
  5. Koeniger, Winfried, 2001. "Trade, Labor Market Rigidities, and Government-Financed Technological Change," IZA Discussion Papers 241, Institute for the Study of Labor (IZA).
  6. Koeniger, Winfried, 2002. "Defensive Innovations," IZA Discussion Papers 454, Institute for the Study of Labor (IZA).
  7. Ethier, Wilfred J., 2005. "Globalization, globalisation: Trade, technology, and wages," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 237-258.
  8. Forum Franco Allemand, 2000. "The Future of Banking in Europe," Working Papers 2000-22, CEPII research center.

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