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Increasing Resistance to Globalization: The Role of Trade in Tasks

Author

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  • Fischer, Christian
  • Egger, Hartmut
Abstract
We show in this paper that trade in tasks can explain increasing resistance to globalization in industrialized countries. In a traditional trade model of a small open economy, we demonstrate that schooling provides protection against losses from trade if trade increases the relative price of the skill-intensive good. Furthermore, increasing public schooling expenditure may help securing support for trade reform by a majority of voters. However, this conclusion is no longer true, if education provides task-specific skills and trade in tasks makes some of these skills obsolete in the open economy. In this case, increasing public schooling expenditure may be of limited help to secure support for trade reform by a majority of voters, even if the reform is welfare-improving. Our analysis suggests to change the education system to one that provides broader, less-specialized skills in order to facilitate trade reforms. Although such skills may be less productive, they do not become obsolete in the open economy and therefore increase the likelihood that a proposal for a welfare-improving trade reform is successful in a referendum.

Suggested Citation

  • Fischer, Christian & Egger, Hartmut, 2019. "Increasing Resistance to Globalization: The Role of Trade in Tasks," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203540, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc19:203540
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    References listed on IDEAS

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    3. Franco, Chiara & Marin, Giovanni & Pietrovito, Filomena, 2022. "Exposure to FDI and attitudes towards multinational enterprises: do M&A impact?," Economics & Statistics Discussion Papers esdp22085, University of Molise, Department of Economics.
    4. Löhnert, Claudius, 2022. "Plausible deniability: Integration vs. outsourcing with heterogeneous firms and unethical suppliers," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-88-22, University of Passau, Faculty of Business and Economics.
    5. Laura Arnemann & Kai A Konrad & Niklas Potrafke, 2021. "Collective memories on the 2010 European debt crisis," European Union Politics, , vol. 22(4), pages 762-784, December.
    6. Vu, Khuong & Haraguchi, Nobuya & Amann, Juergen, 2021. "Deindustrialization in developed countries amid accelerated globalization: Patterns, influencers, and policy insights," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 454-469.
    7. Chiara Franco & Giovanni Marin & Filomena Pietrovito, 2023. "Exposure to FDI and attitudes towards multinational enterprises: Do M&A matter?," The World Economy, Wiley Blackwell, vol. 46(6), pages 1648-1669, June.
    8. Harms, Philipp & Schwab, Jakob, 2020. "Depression of the deprived or eroding enthusiasm of the elites: What has shifted the support for international trade?," European Journal of Political Economy, Elsevier, vol. 64(C).
    9. Berggren, Niclas & Bjørnskov, Christian, 2023. "Does globalization suppress social trust?," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 443-458.
    10. Hartmut Egger & Simone Habermeyer, 2019. "Nonhomothetic preferences and rent sharing in an open economy," CESifo Working Paper Series 7522, CESifo.
    11. Rolf J. Langhammer & Lisandra Flach & Feodora Teti & Lena Wiest & Margherita Atzei & Lisa Scheckenhofer & Joachim Wuermeling & Carsten Hefeker & Friedemann Kainer & Philipp Harms & Michael Kaeding, 2020. "Brexit-Finale: Das letzte Ringen um einen Deal," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(12), pages 03-27, December.

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    More about this item

    Keywords

    Resistance to globalization; Trade in tasks; Public education; Majority voting;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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