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Globalization and the working poor

Author

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  • Joel Hellier

    () (EQUIPPE University of Lille 1 and LEMNA University of Nantes)

  • Ekaterina Kalugina

    () (EPEE University of Evry Val d’Essonne-TEPP)

Abstract

We analyse the effect of globalisation on the incidence of in-work poverty in advanced European countries. We firstly develop an analytical framework that provides bases for the empirical work. Using the EU-SILC database between 2005 and 2010 supplemented by macro-data, we apply both a fixed effect model at the country level and a multilevel model at the individual level. In line with the analytical predictions, trade with emerging countries has a positive and significant effect on in-work poverty whereas the effect of trade with developed countries is non-significant. The impact of social protection indicators is non-significant as well, which suggest that the efficiency effect and the compensation effect could balance each other. Hence, globalization has a positive effect on in-work poverty, which is essentially based on trade with emerging countries.

Suggested Citation

  • Joel Hellier & Ekaterina Kalugina, 2015. "Globalization and the working poor," Working Papers 355, ECINEQ, Society for the Study of Economic Inequality.
  • Handle: RePEc:inq:inqwps:ecineq2015-355
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    More about this item

    Keywords

    Working poor; globalisation; Europe.;

    JEL classification:

    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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