The Globalization of Trade and Labor Markets

Paul Caruana Galizia

Chapter Chapter 5 in Mediterranean Labor Markets in the First Age of Globalization, 2015, pp 67-84 from Palgrave Macmillan

Abstract: Abstract Did tariffs on imports hold back the Mediterranean’s real wage convergence on the New World? The question can be addressed through two streams of research. O’Rourke and Williamson found that the reduction in transatlantic transport costs, through its effects on commodity price convergence, drove Britain’s real wage convergence on the United States.1 In later work, the authors asked whether this finding could be generalized to the European periphery, but lacked the data to go beyond speculation.2 For the poor labor-abundant and land-scarce Mediterranean, this theory predicts rising real wages (price of labor) and falling rents (price of land). In this chapter, I pick up their baton and test the hypothesis that countries with less protection from international trade converged more rapidly on the New World than those with more protection.3

Keywords: Free Trade; Real Wage; Trade Policy; Mediterranean Country; Tariff Rate (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-40084-0_5

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DOI: 10.1057/9781137400840_5

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