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Labour Rents, Adjustment Costs and the Cost of US Steel Trade Restraints in the 1980s

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  • Robert Scott
  • Robert Blecker

Abstract

Recent studies have compared labour gains from protection in import-competing industries with the costs of protection and found that those gains are not large enough to justify trade restraints. This study utilizes a new empirical technique for estimating the costs and benefits of protection in a partial equilibrium framework, and provides a complete and consistent accounting of labour benefits including both labour rents and adjustment costs saved. We find that a small steel tariff could have generated net welfare gains for the US in the 1980s, even though actual protection through Voluntary Restraint Agreements generated net welfare losses.

Suggested Citation

  • Robert Scott & Robert Blecker, 1997. "Labour Rents, Adjustment Costs and the Cost of US Steel Trade Restraints in the 1980s," International Review of Applied Economics, Taylor & Francis Journals, vol. 11(3), pages 399-419.
    • Handle: RePEc:taf:irapec:v:11:y:1997:i:3:p:399-419
    DOI: 10.1080/02692179700000026
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    References listed on IDEAS

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    1. Gary Clyde Hufbauer & Kimberly Ann Elliott, 1994. "Measuring the Costs of Protection in the United States," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 77, April.
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    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics

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