Year: 2002
Type: report
Abstract: This paper argues that labor market distortions in transition and developing economies help explain differential impacts of trade liberalization.We assume that workers differ in ability.In a market economy their earnings depend on their ability.However, earnings are independent of ability due to a common wage set in manufacturing in a transition economy and because of family farms in a developing economy.Our work suggests that trade liberalization without structural reform can have serious adverse effects in transition and developing economies: there can even be mutual losses from trade.
DOI: 10.3386/w8995
Authors: Kala Krishna, Cemile Yavas
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2137702269