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

Author

Listed:
  • Lars Calmfors
  • Girts Dimdins
  • Marie Gustafsson Sendén
  • Henry Montgomery
  • Ulrika Stavlöt

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.

Suggested Citation

  • Lars Calmfors & Girts Dimdins & Marie Gustafsson Sendén & Henry Montgomery & Ulrika Stavlöt, 2012. "Why Do People Dislike Low-Wage Trade Competition with Posted Workers in the Service Sector?," CESifo Working Paper Series 3842, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_3842
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    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp3842.pdf
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    References listed on IDEAS

    as
    1. Kenneth F. Scheve & Matthew J. Slaughter, 1998. "What Determines Individual Trade Policy Preferences?," NBER Working Papers 6531, National Bureau of Economic Research, Inc.
    2. 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.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

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

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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