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Globalization and the working poor

Joel Hellier and Ekaterina Kalugina ()

No 355, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: We analyse the effect of globalisation on the incidence of in-work poverty in advanced European countries. We firstly develop an analytical framework that provides bases for the empirical work. Using the EU-SILC database between 2005 and 2010 supplemented by macro-data, we apply both a fixed effect model at the country level and a multilevel model at the individual level. In line with the analytical predictions, trade with emerging countries has a positive and significant effect on in-work poverty whereas the effect of trade with developed countries is non-significant. The impact of social protection indicators is non-significant as well, which suggest that the efficiency effect and the compensation effect could balance each other. Hence, globalization has a positive effect on in-work poverty, which is essentially based on trade with emerging countries.

Keywords: Working poor; globalisation; Europe. (search for similar items in EconPapers)
JEL-codes: F66 H26 I32 J31 J32 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2015-01
New Economics Papers: this item is included in nep-eur
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