Trade and factor prices under heterogeneous sector-specific skill adapting ability: A tribute to Ronald w Jones
By: Ganguly, Shrimoyee and Acharyya, Rajat
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Material type: 
BookPublisher: Economic & Political Weekly Description: 59(42), Oct, 19, 2024: p.63-70.
In:
Economic & Political WeeklySummary: This paper reflects upon how the 1971 specific factor model of Ronald W Jones still holds its relevance in the face of growing within-country income inequality that has led to rising discontent for globalisation and underlying political tensions causing protectionist trends to make their way back slowly in many developing countries, including India. In a variation of this model with sector-specific skill requirement and endogenous supply of such skills as heterogeneous workers adapt to it through training, we examine how trade liberalisation affects political support from workers and the capitalists for an incumbent government. The Indian workforce with the heterogeneous ability to adapt skills specific to certain manufacturing sectors as the economy is undergoing a structural transition from agriculture to manufacturing in the present era of globalisation provides such a context. We also examine the political–economic implications of the government subsidising a part of the skill-adaptation cost of the workers. The working class as a whole may gain and thus extend their support to such a policy, whereas larger returns to capitalists create scope for financing the subsidy by taxing their incomes.- Reproduced
https://www.epw.in/journal/2024/42/special-articles/trade-and-factor-prices-under-heterogeneous-sector.html
| Item type | Current location | Call number | Vol info | Status | Date due | Barcode |
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Articles
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Indian Institute of Public Administration | 59(42), Oct, 19, 2024: p.63-70 | Available | AR133866 |
This paper reflects upon how the 1971 specific factor model of Ronald W Jones still holds its relevance in the face of growing within-country income inequality that has led to rising discontent for globalisation and underlying political tensions causing protectionist trends to make their way back slowly in many developing countries, including India. In a variation of this model with sector-specific skill requirement and endogenous supply of such skills as heterogeneous workers adapt to it through training, we examine how trade liberalisation affects political support from workers and the capitalists for an incumbent government. The Indian workforce with the heterogeneous ability to adapt skills specific to certain manufacturing sectors as the economy is undergoing a structural transition from agriculture to manufacturing in the present era of globalisation provides such a context. We also examine the political–economic implications of the government subsidising a part of the skill-adaptation cost of the workers. The working class as a whole may gain and thus extend their support to such a policy, whereas larger returns to capitalists create scope for financing the subsidy by taxing their incomes.- Reproduced
https://www.epw.in/journal/2024/42/special-articles/trade-and-factor-prices-under-heterogeneous-sector.html
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