Increasing resistance to globalization: The role of trade in tasks

Arbeitspapier

We show in this paper that trade in tasks can explain increasing resistance to globalization in industrialized countries. In a traditional trade model of a small open economy, we demonstrate that schooling provides protection against losses from trade if trade increases the relative price of the skill-intensive good. Furthermore, increasing public schooling expenditure may help securing support for trade reform by a majority of voters. However, this conclusion is no longer true, if education provides task-specific skills and trade in tasks makes some of these skills obsolete in the open economy. In this case, increasing public schooling expenditure may be of limited help to secure support for trade reform by a majority of voters, even if the reform is welfare-improving. Our analysis suggests to change the education system to one that provides broader, less-specialized skills in order to facilitate trade reforms. Although such skills may be less productive, they do not become obsolete in the open economy and therefore increase the likelihood that a proposal for a welfare-improving trade reform is successful in a referendum.

Object Details

• Language: Englisch
• ISBN: 978-3-86304-304-9

References and Relationships

• Bibliographic citation: Series: DICE Discussion Paper ; No. 305

Classification and Topics

• Classification: Wirtschaft ; Neoclassical Models of Trade ; International Relations, National Security, and International Political Economy: General ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; Education: Government Policy
• Subject: Resistance to globalization ; Trade in tasks ; Public education ; Majority voting

Contributors, Location and Time

• Event: Geistige Schöpfung
• (who): Egger, Hartmut ; Fischer, Christian
• Event: Veröffentlichung
• (who): Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
• (where): Düsseldorf
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/188365
• Last update: 20.09.2024, 8:21 AM CEST