Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/80084
Authors: 
Krebs, Tom
Krishna, Pravin
Maloney, William
Year of Publication: 
2004
Series/Report no.: 
Working Paper, Brown University, Department of Economics 2004-09
Abstract: 
This paper studies empirically the relationship between trade policy and individual income risk faced by workers. The analysis proceeds in three steps. First, longitudinal data on workers are used to estimate time-varying individual income risk parameters in various manufacturing sectors. The estimated income risk parameters and data on trade barriers are then used to analyze the relationship between trade policy and income risk. Finally, a simple dynamic general equilibrium model with incomplete markets is used assess the corresponding welfare costs. In the implementation of this methodology using Mexican data, we find that trade policy changes have a significant short run effect on income risk. Further, while the tariff level has an insignificant mean effect, it nevertheless changes the degree to which macroeconomic shocks affect income risk.
Subjects: 
Trade Policy
Income Risk
Macroeconomics
JEL: 
D52
E21
F1
F13
Document Type: 
Working Paper

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