New dawn fades: The post-referendum rise in import costs has hurt UK workers

a column by Rui Costa, Swati Dhingra and Stephen Machin for VOX: CEPR’s Policy Portal

Some commentators argue that globalisation is systematically connected to the real-wage and productivity stagnation seen across the developed world.

This column analyses the relationship between international trade and worker outcomes in the immediate aftermath of the Brexit referendum, when the value of the sterling fell massively against other nations’ currencies. It finds that the rise in import costs from the sterling depreciation hurt wages and training.

This relative decline in real earnings of workers has reinforced pre-existing real-wage stagnation; UK workers have not fared well since the referendum price rise.

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