Citation

Discussion Paper Details

Please find the details for DP435 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Industrial Policy in the Presence of Wage Distortion: The Case of the US Auto and Steel Industries

Author(s): Jaime de Melo and David Tarr

Publication Date: July 1990

Keyword(s): Protectionism, Trade Policy, Unions and Wage Premium

Programme Area(s): International Trade and Regional Economics

Abstract: This paper examines the welfare effects of protection in two sectors characterized by high wage premia, autos and steel, to determine if protection is justified to correct for the labor misallocation due to wage premia. If wage premia are exogenous, under most product market structures, labor misallocation is too small to justify protection. More importantly, we argue that due to union influence in autos and steel, the wage premium is endogenous. If this is the case, then wage premia may even exacerbate the welfare costs of protecti.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=435

Bibliographic Reference

de Melo, J and Tarr, D. 1990. 'Industrial Policy in the Presence of Wage Distortion: The Case of the US Auto and Steel Industries'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=435