Welfare State, Market Imperfections and International Trade
Within a two-sector-two-country model of trade with aggregate scale economies and unionisation, a more generous welfare state in one country increases welfare in that country and can have positive spillover effects on the other. Furthermore, synchronised expansions of social security are more welfare enhancing than unilateral ones. Our results counter the fears that a race to the bottom in social standards may result from the ‘shrinking-tax-base’ entailed by international capital mobility. While affecting trade patterns and income distribution, capital mobility interacts with welfare state policies in increasing welfare, even when capital flows out of the country that initiates the shock. Copyright Springer Science+Business Media, LLC 2007
(This abstract was borrowed from another version of this item.)
|Date of creation:||Aug 2003|
|Contact details of provider:|| Postal: Dundee, DD1 4HN|
Phone: (01382) 344375
Fax: (01382) 344691
Web page: http://www.dundee.ac.uk/econman/
More information through EDIRC
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.:
- Hassan Molana & Catia Montagna, 2005.
"Aggregate Scale Economies, Market Integration and Optimal Welfare State Policy,"
- Molana, Hassan & Montagna, Catia, 2006. "Aggregate scale economies, market integration, and optimal welfare state policy," Journal of International Economics, Elsevier, vol. 69(2), pages 321-340, July.
- Hassan Molana & Catia Montagna, 2004. "Aggregate Scale Economies, Market Integration, and Optimal Welfare State Policy," Dundee Discussion Papers in Economics 172, Economic Studies, University of Dundee.
- Hassan Molana & Catia Montagna, 2005. "Aggregate Scale Economies, Market Integration, and Optimal Welfare State Policy," International Trade 0510002, EconWPA.
- Frederick Van der Ploeg, 2003. "Do Social Policies Harm Employment and Growth?," CESifo Working Paper Series 886, CESifo Group Munich.
- Hassan Molana & Catia Montagna, 2002. "Cumulative Causation, Capital Mobility and the Welfare State," Dundee Discussion Papers in Economics 128, Economic Studies, University of Dundee.
- Alberto Alesina & Roberto Perotti, 1994.
"The Welfare State and Competitiveness,"
NBER Working Papers
4810, National Bureau of Economic Research, Inc.
- Daron Acemoglu & Robert Shimer, 1999.
"Productivity Gains from Unemployment Insurance,"
99-29, Massachusetts Institute of Technology (MIT), Department of Economics.
- Dani Rodrik, 1997. "Has Globalization Gone Too Far?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 57, 03.
- Young, Allyn A., 1928. "Increasing Returns and Economic Progress," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 38, pages 527-542.
- Perotti, Roberto & Alesina, Alberto, 1997. "The Welfare State and Competitiveness," Scholarly Articles 4553027, Harvard University Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:dun:dpaper:146. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Andrzej Kwiatkowski)
If references are entirely missing, you can add them using this form.