Gains from Trade? The Net Effect of the Trans-Pacific Partnership Agreement on U.S. Wages
AbstractRecent estimates of the U.S. economic gains that would result from the proposed Trans-Pacific Partnership (TPP) are very small — only 0.13 percent of GDP by 2025. Taking into account the un-equalizing effect of trade on wages, this paper finds the median wage earner will probably lose as a result of any such agreement. In fact, most workers are likely to lose — the exceptions being some of the bottom quarter or so whose earnings are determined by the minimum wage; and those with the highest wages who are more protected from international competition. Rather, many top incomes will rise as a result of TPP expansion of the terms and enforcement of copyrights and patents. The long-term losses, going forward over the same period (to 2025), from the failure to restore full employment to the United States have been some 25 times greater than the potential gains of the TPP, and more than five times as large as the possible gains resulting from a much broader trade agenda.
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Bibliographic InfoPaper provided by Center for Economic and Policy Research (CEPR) in its series CEPR Reports and Issue Briefs with number 2013-14.
Length: 9 pages
Date of creation: Sep 2013
Date of revision:
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trade; trans-pacific partnership; TPP; jobs; GDP growth; wages; workers;
Find related papers by JEL classification:
- E - Macroeconomics and Monetary Economics
- E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- F - International Economics
- F1 - International Economics - - Trade
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- J - Labor and Demographic Economics
- J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-09-26 (All new papers)
- NEP-INT-2013-09-26 (International Trade)
- NEP-LMA-2013-09-26 (Labor Markets - Supply, Demand, & Wages)
- NEP-MAC-2013-09-26 (Macroeconomics)
- NEP-PKE-2013-09-26 (Post Keynesian Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Peter A. Petri & Michael G. Plummer & Fan Zhai, 2012. "The Trans-Pacific Partnership and Asia-Pacific Integration: A Quantitative Assessment," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 6642.
- David Rosnick & Dean Baker, 2012. "Missing the Story: The OECD's Analysis of Inequality," CEPR Reports and Issue Briefs 2012-19, Center for Economic and Policy Research (CEPR).
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