Sector of Employment and Employee Type Affecting Trade Preferences Free Essay Example, 2500 words

Several studies have brought it out that the UK is blessed with a mix of unskilled as well as skilled labour and though the proportion is slightly tilted higher towards unskilled labour, the skilled labour is on a rise. We have seen above about fitting the HO model on the UK and analyzing the trade preferences. Now we will look at how the RV model works on it. As per the RV model, the labour in the UK that is employed in sectors where price shall fall due to the trade policy i. e. the sectors that have a comparative disadvantage shall have a preference for protection whereas those who are employed in sectors having comparative-advantage shall have a preference towards free trade. Asset Ownership Affecting Trade PreferencesThe analysis of individual trade preferences has an assumption that individuals certainly know about the impact that trade policies have on their income as well as on the assets that they hold. This happens to be a common assumption, though not universal. Ina trade model, it is generally assumed that all the income of the factors is spent on daily consumption items. We will write a custom essay sample on Sector of Employment and Employee Type Affecting Trade Preferences or any topic specifically for you Only $17.96 $11.86/page