Trade and the Distribution of Welfare: An Empirical Approach

Abstract:

Brexit and the rise of populist politicians have pushed globalization and inequality to the forefront of public policy discussions. The central question in this debate is who gains and who loses from globalization, and by how much. The purpose of this project is to measure how growth of international trade affects both overall welfare and the distribution of welfare in Denmark. Addressing this question requires detailed data on international trade, individuals’ income, and households’ consumption. In this project we will merge these three types of information into a unified dataset. To employ this data, we will develop a novel empirical framework which combines mutually incompatible frameworks from the welfare economics and international trade literature.