Potential consequences of post-Brexit trade barriers for earnings inequality in the UK

Rachel Griffith, Peter Levell and Agnes Norris Keiller

No 15126, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We examine the distributional consequences of post-Brexit trade barriers on wages in the UK. We quantify changes in trade costs across industries accounting for input-output links across domestic industries and global value chains. We allow for demand substitution by firms and consumers and worker reallocation across industries. We document the impact at the individual and household level. Blue-collar workers are the most exposed to negative consequences of higher trade costs, because they are more likely to be employed in industries that face increases in trade costs, and are less likely to have good alternative employment opportunities available in their local labour markets. Overall new trade costs have a regressive impact with lower-paid workers facing higher exposure than higher-paid workers once we account for the exposure of other household members.

Keywords: Trade; Income distribution; Inequality (search for similar items in EconPapers)
JEL-codes: D33 D57 F61 F66 J20 (search for similar items in EconPapers)
Date: 2020-08
New Economics Papers: this item is included in nep-int and nep-ore
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Potential Consequences of Post‐Brexit Trade Barriers for Earnings Inequality in the UK (2021)
Working Paper: Potential consequences of post-Brexit trade barriers for earnings inequality in the UK (2020)
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