Predicting the Poverty Impacts of Trade Reform
An important area of research in recent years involves assessing the microeconomic implications of macro-level policies— particularly those related to international trade. While a wide range of research methodologies are available for assessing the...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2004/11/5509337/predicting-poverty-impacts-trade-reform http://hdl.handle.net/10986/14196 |
| Summary: | An important area of research in recent
years involves assessing the microeconomic implications of
macro-level policies— particularly those related to
international trade. While a wide range of research
methodologies are available for assessing the microeconomic
incidence of micro-policies, as well as for assessing the
effect of macro-level policies on markets and broad groups
of households, there is a gap when it comes to eliciting the
disaggregated household and firm level effects of trade
policies. Recent research addresses this knowledge gap and
the present survey offers an overview of this literature.
The preponderance of the evidence from the studies
encompassed by this survey points to the dominance of
earnings-side effects over consumption-side effects of trade
reform. This is problematic, since household surveys are
notable for their underreporting of income. From the
perspective of the poor, it is the market for unskilled
labor that is most important. The poverty effects of trade
policy often hinge crucially on how well the increased
demand for labor in one part of the economy is transmitted
to the rest of the economy by way of increased wages,
increased employment, or both. Further econometric research
aimed at discriminating between competing factor mobility
hypotheses is urgently needed. |
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