Trading-off the Income Gains and the Inequality Costs of Trade Policy

This paper characterizes the trade-off between the income gains and the inequality costs of trade using survey data for 54 developing countries. Tariff data on agricultural and manufacturing goods are combined with household survey data on detailed income and expenditure patterns to estimate the fir...

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Autores principales: Artuc, Erhan, Porto, Guido Gustavo, Rijkers, Bob
Formato: Articulo Documento de trabajo
Lenguaje:Inglés
Publicado: 2018
Materias:
Ciencias Económicas
income gains
inequality costs
Acceso en línea:http://sedici.unlp.edu.ar/handle/10915/69628
http://www.cedlas.econo.unlp.edu.ar/wp/wp-content/uploads/doc_cedlas236.pdf
Aporte de:
SEDICI (UNLP) de Universidad Nacional de La Plata
id I19-R120-10915-69628
record_format dspace
institution Universidad Nacional de La Plata
institution_str I-19
repository_str R-120
collection SEDICI (UNLP)
language Inglés
topic Ciencias Económicas
income gains
inequality costs
spellingShingle Ciencias Económicas
income gains
inequality costs
Artuc, Erhan
Porto, Guido Gustavo
Rijkers, Bob
Trading-off the Income Gains and the Inequality Costs of Trade Policy
topic_facet Ciencias Económicas
income gains
inequality costs
description This paper characterizes the trade-off between the income gains and the inequality costs of trade using survey data for 54 developing countries. Tariff data on agricultural and manufacturing goods are combined with household survey data on detailed income and expenditure patterns to estimate the first order effects of the elimination of tariffs on household welfare. We assess how these welfare effects vary across the distribution by estimating impacts on the consumption of traded goods, wage income, farm and non-farm family enterprise income, and government transfers. For each country, the income gains and the inequality costs of trade liberalization are quantified and the trade-offs between them are assessed using an Atkinson social welfare index. We find average income gains from liberalization in 44 countries and average income losses in 10 countries. Across countries in our sample, the gains from trade are 1.8 percent of real household expenditure on average. We find overwhelming evidence of a trade-off between the income gains (losses) and the inequality costs (gains), which arise because trade tends to exacerbate income inequality: 46 countries face a trade-off, while only 8 do not. These trade-offs are typically resolved in favor of lower tariffs. In the majority of developing countries, the prevailing tariff structure thus induces sizeable welfare losses.
format Articulo
Documento de trabajo
author Artuc, Erhan
Porto, Guido Gustavo
Rijkers, Bob
author_facet Artuc, Erhan
Porto, Guido Gustavo
Rijkers, Bob
author_sort Artuc, Erhan
title Trading-off the Income Gains and the Inequality Costs of Trade Policy
title_short Trading-off the Income Gains and the Inequality Costs of Trade Policy
title_full Trading-off the Income Gains and the Inequality Costs of Trade Policy
title_fullStr Trading-off the Income Gains and the Inequality Costs of Trade Policy
title_full_unstemmed Trading-off the Income Gains and the Inequality Costs of Trade Policy
title_sort trading-off the income gains and the inequality costs of trade policy
publishDate 2018
url http://sedici.unlp.edu.ar/handle/10915/69628
http://www.cedlas.econo.unlp.edu.ar/wp/wp-content/uploads/doc_cedlas236.pdf
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