Revisiting Inequality: International Trade and European Integration Effects

Ioan Octavian Rusu and Dr. Theodoros Katerinakis, Department of Economics, Drexel University, 3141 Chestnut St, Philadelphia, PA 19104

With growing income and wealth inequality around the world in recent years, there is a heightened interest in economic studies to identify what are the causes, how they differ across nations, and what could be done to ameliorate this phenomenon. Previous literature emphasized the effects of globalization on income inequality in partner countries due to classical model predictions, such as Heckscher-Ohlin and Stolper-Samuelson, which use a quantitative approach to demonstrate how lower skilled workers in developed countries tend to suffer from increased international trade. However, relatively less attention has been given to aspects that are particular to only some trade partners, like the different levels of economic and political integration among European countries. We show how different regions in Europe that demonstrate shared views on labor dynamics tend to have less negative effects from trade integration. The distinct areas identified are Northern/Scandinavian, the Western Core, Central and Eastern European, and Southern/Mediterranean countries. The focus of the study is on showing evidence that when similarly developed countries coordinate on labor protection mechanisms, their workforce suffers less from international trade in terms of wages and wealth. Moreover, we show that corporatist labor protection aids the government efforts in reducing inequality at high levels of regional integration, building on historical parameters of labor policy differentiation. Finally, we cover how in some regions there are key industries that impact changes in inequality, with a spotlight on the maritime economy of Greece, one of the world leaders in ship ownership, which leads within its region through policy adaptability during this challenging pandemic era.

Additional Abstract Information

Presenter: Ioan Octavian Rusu

Institution: Drexel University

Type: Poster

Subject: Economics

Status: Approved

Time and Location

Session: Poster 5
Date/Time: Tue 12:30pm-1:30pm
Session Number: 4137