Trade Policy and Poverty in the United States: Theory and Evidence, 1947-1990

Ravi Batra and Daniel Slottje

Review of International Economics, 1993, vol. 1, issue 3, 189-208

Abstract: This paper develops a two-sector general equilibrium model to examine the impact of technical progress, factor accumulation, labor growth, unemployment, trade policy, and the government's antipoverty programs on the rate of poverty. The results are then tested empirically using the data regarding the U.S. We find that low unemployment, productivity growth, and government transfers have the expected effects of alleviating poverty; but trade liberalization has the unexpected effect of being associated with a major increase in poverty--a result contradicting traditional views. Copyright 1993 by Blackwell Publishing Ltd.

Date: 1993
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