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

  • Sapir, André

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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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
Date of revision:
Handle: RePEc:cpr:ceprdp:2595
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  1. Naylor, Robin, 1997. "Union Wage Strategies and International Trade," The Warwick Economics Research Paper Series (TWERPS) 480, University of Warwick, Department of Economics.
  2. Wood Júnior, Thomaz, 1995. "Workers," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 35(2), January.
  3. Efraim Sadka & Assaf Razin, 1998. "Migration and Pension," IMF Working Papers 98/165, International Monetary Fund.
  4. World Bank, 2000. "World Development Indicators 2000," World Bank Publications, The World Bank, number 13828.
  5. André Sapir, 2000. "EC regionalism at the turn of the millennium: towards a new paradigm?," ULB Institutional Repository 2013/8140, ULB -- Universite Libre de Bruxelles.
  6. Adrian Wood, 1995. "How Trade Hurt Unskilled Workers," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 57-80, Summer.
  7. André Sapir, 1996. "The harmonization of social policies: lessons from European integration," ULB Institutional Repository 2013/8164, ULB -- Universite Libre de Bruxelles.
  8. Dani Rodrik, 1997. "Has Globalization Gone Too Far?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 57.
  9. 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.
  10. 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.
  11. 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).
  12. 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, December.
  13. 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.
  14. 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.
  15. Dewatripont, Mathias & Sapir, Andre & Sekkat, Khalid (ed.), 1999. "Trade and Jobs in Europe: Much Ado About Nothing?," OUP Catalogue, Oxford University Press, number 9780198293606, July.
  16. 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.
  17. William R. Cline, 1997. "Trade and Income Distribution," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 58.
  18. 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.
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