Working Paper

Seeking Shared Prosperity through Trade

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collection.link.5
https://openknowledge.worldbank.org/handle/10986/9
collection.name.5
Policy Research Working Papers
dc.contributor.author
Cali, Massimiliano
dc.contributor.author
Hollweg, Claire H.
dc.contributor.author
Ruppert Bulmer, Elizabeth
dc.date.accessioned
2015-07-17T15:47:50Z
dc.date.available
2015-07-17T15:47:50Z
dc.date.issued
2015-06
dc.date.lastModified
2017-12-14T04:37:45Z
dc.description.abstract
Increasing the trade integration of developing countries can make a vital contribution to boosting shared prosperity, but it also exposes producers and consumers to exogenous shocks that alter relative prices, sometimes positively and sometimes negatively. This paper discusses the short-run effects of trade-related shocks on households to capture the potential welfare impact on the poor. The discussion explores the channels through which trade shocks are transmitted to households in the bottom of the income distribution, namely through consumption, household production, and market-based labor activities. The degree to which price shocks are passed through from borders to point of sale is a key determinant of the gains from trade and the ultimate welfare impact. Trade changes in agriculture directly affect households through their consumption basket. Lower agricultural prices reduce the cost of consumables, but these welfare gains may be offset by lower earnings for households that produce these same goods. Poorer households tend to be net consumers of agricultural products, suggesting a net welfare gain, but agricultural wage workers could suffer from wage cuts. Because poorer households tend to consume relatively fewer nonagricultural products, that is nonessentials, any trade-related shocks to prices of nonagricultural product are likely to be transmitted via labor channels. Despite significant evidence that nonagricultural trade reform ultimately leads to job creation and enhanced productivity, the short-run effects can be mixed. The costs incurred by workers to transition to new jobs slow the adjustment of the economy to a new steady state. Labor mobility costs, which tend to be higher in developing countries and for unskilled workers, reduce the potential gains to trade by diverting labor market adjustment from its most efficient path.
en
dc.identifier
http://documents.worldbank.org/curated/en/2015/06/24649967/seeking-shared-prosperity-through-trade
dc.identifier.uri
http://hdl.handle.net/10986/22200
dc.language
English
dc.language.iso
en_US
dc.publisher
World Bank, Washington, DC
dc.relation.ispartofseries
Policy Research Working Paper;No. 7314
dc.rights
CC BY 3.0 IGO
dc.rights.holder
World Bank
dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo/
dc.subject
NEW MARKET
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MARKET STRUCTURE
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ECONOMIC GROWTH
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CLOSED ECONOMIES
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PRODUCTION
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REMOTE REGIONS
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PRICE INCREASES
dc.subject
SKILLED WORKERS
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BARRIER
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EXPORT SECTORS
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GLOBAL MARKETS
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INCOME
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PERFECT COMPETITION
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EMERGING ECONOMIES
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EXCHANGE
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EXPORTS
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DEVELOPING COUNTRIES
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ELASTICITY
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DEVELOPING ECONOMIES
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POLITICAL ECONOMY
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SUSTAINABLE ECONOMIC GROWTH
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INTERNATIONAL LABOUR ORGANIZATION
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WORLD DEVELOPMENT INDICATORS
dc.subject
WELFARE
dc.subject
INCENTIVES
dc.subject
DISTRIBUTION
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TRADE REFORMS
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DOMESTIC PRICE
dc.subject
SUBSIDY
dc.subject
PRICE
dc.subject
REAL INCOME
dc.subject
INPUTS
dc.subject
MARKET ACCESS
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DEVELOPING COUNTRY
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SAFETY NETS
dc.subject
DEVELOPMENT
dc.subject
COMMUNICATIONS
dc.subject
LABOR MARKET
dc.subject
INFLUENCE
dc.subject
FOREIGN TRADE
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PRODUCTION STRUCTURE
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ENTRY POINTS
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COSTS
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DEVELOPMENT ECONOMICS
dc.subject
EXPORT GROWTH
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LOW-INCOME COUNTRIES
dc.subject
TRADE BLOCS
dc.subject
REGIONAL TRADE
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FOOD PRICE
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PRODUCTIVITY
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GLOBALIZATION
dc.subject
BARRIERS TO ENTRY
dc.subject
MARKETS
dc.subject
CONNECTIVITY
dc.subject
CAPITAL ASSETS
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TOTAL COSTS
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SOCIAL PROTECTION
dc.subject
INCOME LEVELS
dc.subject
MIDDLE-INCOME COUNTRIES
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PRICE ELASTICITY
dc.subject
TRADE POLICY
dc.subject
INTERNATIONAL COMPETITION
dc.subject
GLOBAL EXPORTS
dc.subject
PRICE SUBSIDIES
dc.subject
TRADE COMPETITIVENESS
dc.subject
ECONOMIC REFORM
dc.subject
SUBSIDIES
dc.subject
COMMODITY PRICE
dc.subject
TRADE POLICIES
dc.subject
LIBERALIZATION
dc.subject
TAXES
dc.subject
UNEMPLOYMENT
dc.subject
EQUITY
dc.subject
POINT OF SALE
dc.subject
AGRICULTURAL SHOCKS
dc.subject
CONSUMPTION
dc.subject
WAGES
dc.subject
INTERNATIONAL TRADE
dc.subject
BARRIERS
dc.subject
STATE CAPTURE
dc.subject
VALUE
dc.subject
COMPETITIVENESS
dc.subject
MACROECONOMICS
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PURCHASING POWER
dc.subject
DEMAND
dc.subject
SAFETY NET
dc.subject
ECONOMY
dc.subject
AGRICULTURE
dc.subject
CONSUMERS
dc.subject
INCOMES
dc.subject
JOB CREATION
dc.subject
MEASUREMENT
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SHARES
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OPPORTUNITY COSTS
dc.subject
TRADE LIBERALIZATION
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ADVERSE CONSEQUENCES
dc.subject
OUTPUT
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INSURANCE
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ECONOMIC DEVELOPMENT
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TRADE
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FOREIGN COMPETITION
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RETAIL SERVICES
dc.subject
GDP
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DOMESTIC PRICES
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GOODS
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MARKET SHARE
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SECURITY
dc.subject
DOMESTIC ECONOMY
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BILATERAL TRADE
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INVESTMENT
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EXTREME POVERTY
dc.subject
DOMESTIC COMPETITION
dc.subject
SHARE
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COMPARATIVE ADVANTAGE
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ADVERSE IMPACT
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BUSINESS ENVIRONMENT
dc.subject
REMOTE LOCATIONS
dc.subject
COMMODITIES
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ECONOMIC GEOGRAPHY
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PRIVATE SECTOR GROWTH
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FOOD PRICES
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LABOR MARKETS
dc.subject
COMMODITY PRICES
dc.subject
OUTCOMES
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REMOTE AREAS
dc.subject
COMMODITY
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INTERNATIONAL MARKETS
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POSITIVE EFFECTS
dc.subject
PRICES
dc.subject
BENEFITS
dc.subject
DEVELOPMENT POLICY
dc.subject
INCOME GROUPS
dc.subject
COMPETITION
dc.title
Seeking Shared Prosperity through Trade
en
dc.type
Working Paper
en
okr.date.disclosure
2015-06-17
okr.doctype
Publications & Research
okr.doctype
Publications & Research :: Policy Research Working Paper
okr.docurl
http://documents.worldbank.org/curated/en/2015/06/24649967/seeking-shared-prosperity-through-trade
okr.globalpractice
Trade and Competitiveness
okr.googlescholar.linkpresent
yes
okr.identifier.doi
10.1596/1813-9450-7314
okr.identifier.externaldocumentum
090224b082f42a62_1_0
okr.identifier.internaldocumentum
24649967
okr.identifier.report
WPS7314
okr.language.supported
en
okr.pdfurl
http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2015/06/17/090224b082f42a62/1_0/Rendered/PDF/Seeking0shared0prosperity0through0trade.pdf
en
okr.topic
International Economics and Trade :: Free Trade
okr.topic
Macroeconomics and Economic Growth :: Markets and Market Access
okr.topic
International Economics and Trade :: Trade and Labor
okr.topic
Poverty Reduction :: Achieving Shared Growth
okr.topic
Social Protections and Labor :: Labor Markets
okr.topic
Social Protections and Labor :: Labor Policies
okr.topic
Macroeconomics and Economic Growth :: Markets and Market Access
okr.unit
Trade and Competitiveness Global Practice Group

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