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Labour Adjustment Costs and British Footwear Protection

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  • Winters, L. Alan

Abstract

Import protection is frequently advocated as a means of preserving jobs and avoiding labour adjustment costs. Defining adjustment costs in terms of output forgone during the process of adjustment and ignoring any general equilibrium repercussions, we estimate that quantitative restrictions on British footwear imports during 1979 protected about 1,000 jobs and avoided once-and-for-all adjustment costs of only around 1 million pounds sterling. The result is based on new data which reveal high rates of labour turnover in the footwear sector and so imply that displaced labour is readily re-employed. We use a model of output and employment derived from a multi-input, multi-output profit function, which shows that trade restrictions have relatively small effects on UK output and employment.

Suggested Citation

  • Winters, L. Alan, 1990. "Labour Adjustment Costs and British Footwear Protection," CEPR Discussion Papers 376, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:376
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    Cited by:

    1. Joseph F. Francois, 2004. "Assessing the Impact of Trade Policy on Labour Markets and Production," Economie Internationale, CEPII research center, issue 99, pages 27-47.
    2. Steven J. Matusz & David G. Tarr, 2017. "Adjusting To Trade Policy Reform," World Scientific Book Chapters, in: Trade Policies for Development and Transition, chapter 4, pages 77-114, World Scientific Publishing Co. Pte. Ltd..
    3. Vancauteren, Marc & Pinna, Anna Maria & Brenton, Paul, 2000. "Adjustment To Globalisation: A Study Of The Footwear Industry In Europe," ERSA conference papers ersa00p262, European Regional Science Association.
    4. Kym Anderson, 2005. "On the Virtues of Multilateral Trade Negotiations," The Economic Record, The Economic Society of Australia, vol. 81(255), pages 414-438, December.
    5. Kym Anderson, 2016. "Contributions Of The Gatt/Wto To Global Economic Welfare: Empirical Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 30(1), pages 56-92, February.
    6. Marius Brülhart & Robert Elliott, 2002. "Labour-market effects of intra-industry trade: Evidence for the United Kingdom," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(2), pages 207-228, June.
    7. Fernandez, Ignacio del Rosal, 2000. "How costly is the maintenance of the coal-mining jobs in Europe? The Spanish case 1989-1995," Energy Policy, Elsevier, vol. 28(8), pages 537-547, July.
    8. Greenaway, David & Nelson, Douglas, 2000. "The Assessment: Globalization and Labour-Market Adjustment," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 16(3), pages 1-11, Autumn.
    9. Porto, Guido, 2012. "The cost of adjustment to green growth policies : lessons from trade adjustment costs," Policy Research Working Paper Series 6237, The World Bank.
    10. Guido G. Porto, 2008. "Agro-Manufactured Export Prices, Wages and Unemployment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(3), pages 748-764.
    11. Kym Anderson, 2004. "The challenge of Reducing Subsidies and Trade Barriers," Centre for International Economic Studies Working Papers 2004-12, University of Adelaide, Centre for International Economic Studies.
    12. Michael W. Klein & Scott Schuh & Robert K. Triest, 2002. "Job creation, job destruction, and international competition: a literature review," Working Papers 02-7, Federal Reserve Bank of Boston.
    13. Bacchetta, Marc & Jansen, Marion, 2003. "Adjusting to trade liberalization: The role of policy, institutions and WTO Disciplines," WTO Special Studies, World Trade Organization (WTO), Economic Research and Statistics Division, volume 7, number 7.
    14. R J R Elliott & J Lindley, 2003. "Trade, Skills and Adjustment Costs: A Study of Intra-Sectoral Labour Mobility in the UK," Economics Discussion Paper Series 0312, Economics, The University of Manchester.

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