Title: WAGE SUBSIDY AND WELFARE IN DEVELOPING COUNTRIES
Abstract: This paper seeks to answer if wage subsidy to workers displaced due to trade reform raises welfare in a developing country. We use a general equilibrium model with non-specific factor inputs and trade liberalization as a policy variable. A combination of wage subsidy and tariff rate obtains the second-best welfare level. The theoretical result is new, policy-relevant and important in view of political-economy aspects of free trade in developing and transition countries.
Publication Year: 2011
Publication Date: 2011-04-08
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 1
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