Quotation Breuss, Fritz. 2010. Globalisation, EU Enlargement and Income Distribution. International Journal of Public Policy 6 (1/2): 16-34.


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Abstract

Advanced industrial countries have been exhibiting a steady decline of the labor income shares in the last two decades. We explain this phenomenon by resorting to the old Stolper-Samuelson theorem. The conclusions concerning the impact of free trade on the income distribution are unambiguous in a Heckscher-Ohlin world with two countries, two goods and two factors of production (capital and labor). In contrast, the consequences of FDI from the capital abundant country (EU) to the labor abundant CEEC are ambiguous. Both scenarios are investigated theoretically, simulated with a hypothetical two country CGE model, including the EU and the CEEC and then tested empirically. Accordingly, globalisation has contributed to a decline in the labor income shares in the EU and an increase in the CEEC. Additionally, those EU countries which are engaged more in trade with the CEEC ('mini-globalisation' in Europe) can expect a sharper decline in the wage share.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal International Journal of Public Policy
Language English
Title Globalisation, EU Enlargement and Income Distribution
Volume 6
Number 1/2
Year 2010
Page from 16
Page to 34
Reviewed? Y
URL http://www.inderscience.com/search/index.php?action=record&rec_id=31204&prevQuery=&ps=10&m=or

Associations

People
Breuss, Fritz (Details)
Organization
Institute for International Economics IN (Details)
Europainstitut (Badinger) (Former organization)
Research areas (Ă–STAT Classification 'Statistik Austria')
5115 European integration (Details)
5300 Economics (Details)
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