Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2004-05-04
Revision-Date: 2004-06-15
Number: 04-051/2
Author-Name: J. Francois
Author-Email: francois@few.eur.nl
Author-Workplace-Name: Faculty of Economics, Erasmus Universiteit Rotterdam, and CEPR
Author-Name: H. Rojas-Romagosa
Author-Email: rojas-romagosa@tinbergen.nl
Author-Workplace-Name: Faculty of Economics, Erasmus Universiteit Rotterdam
Title: Trade Policy and the Household Distribution of Income
Abstract: We explore the relationship between import protection and the household distribution of income. We first develop a general-equilibrium mapping from tariffs to household inequality measures. This also yields predictions for linkages between tariffs, development level, and observed household inequality. Working with a new dataset, we then examine crosscountry variation in inequality with respect to import protection. Results are consistent with predictions of the factor-intensity model of trade. Regression results suggest that import protection makes income distribution worse for countries in labor-intensive diversification cones. This relationship shifts to one of falling inequality as incomes rise and we move to capital-intensive diversification cones.
Classification-JEL: F13; D31; O15
Keywords: trade; inequality; distribution of income; Atkinson index; Gini coefficient; globalization; tariffs
File-Url: https://papers.tinbergen.nl/04051.pdf
File-Format: application/pdf
File-Size: 187837 bytes
Handle: RePEc:tin:wpaper:20040051