GoTriple's project summary
The submitted research project is supposed to contribute to the ongoing debate on the impact of growing international trade on labour market performance. As trade theory shows, opening of economy entails long term welfare improvement, but in the short run it poses a serious problem of adjustment to changing economic conditions (in terms of production and employment structure, wages or geographical distribution of economic activity). With economy (and labour market in particular) lacking mechanisms of efficient adjustment, the short-run costs related to trade-openness may outweigh long run welfare gains. Submitted project focuses on experience of selected countries of Central Europe (CECs), particularly after their EU accession. CECs offer a very interesting research case from theoretical point of view. Their factor endowment place them in the world’s labour division in the position between highly developed countries and developing countries. As a result – from the point of view of traditional theory of international – exchange with developed countries is supposed to be beneficial for CECs’ labour force, particularly its low-skilled part, while trade with developing countries produces opposite results. In the same time in CECs trade openness is dynamically growing, with intra-industry exchange in particular (vertically differentiated at first, horizontally differentiated in the later stage). Moreover, trade-labour market relationship in Western European countries has been a subject of many in-depth analyses, however rigours analysis for the group of new members is lacking. CECs, with significant share in total EU-27 population, contribute to a large extent to the general EU labour market performance. Moreover, in their case a need for efficient adjustment mechanisms was intensified with transition from centrally-planned to market economy.