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Trade and labor market outcomes

Author: Elhanan Helpman; Oleg Itskhoki; Stephen Redding; National Bureau of Economic Research.
Publisher: Cambridge, Mass. : National Bureau of Economic Research, ©2011.
Series: Working paper series (National Bureau of Economic Research), no. 16662.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Database:WorldCat
Summary:
This paper reviews a new framework for analyzing the interrelationship between inequality, unemployment, labor market frictions, and foreign trade. This framework emphasizes firm heterogeneity and search and matching frictions in labor markets. It implies that the opening of trade may raise inequality and unemployment, but always raises welfare. Unilateral reductions in labor market frictions increase a country's  Read more...
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Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Elhanan Helpman; Oleg Itskhoki; Stephen Redding; National Bureau of Economic Research.
OCLC Number: 696742421
Notes: Title from http://www.nber.org/papers/16662 viewed Jan. 19, 2011.
"January 2011."
Description: 1 online resource (47 p.) : ill.
Series Title: Working paper series (National Bureau of Economic Research), no. 16662.
Responsibility: Elhanan Helpman, Oleg Itskhoki, Stephen Redding.

Abstract:

This paper reviews a new framework for analyzing the interrelationship between inequality, unemployment, labor market frictions, and foreign trade. This framework emphasizes firm heterogeneity and search and matching frictions in labor markets. It implies that the opening of trade may raise inequality and unemployment, but always raises welfare. Unilateral reductions in labor market frictions increase a country's welfare, can raise or reduce its unemployment rate, yet always hurt the country's trade partner. Unemployment benefits can alleviate the distortions in a country's labor market in some cases but not in others, but they can never implement the constrained Pareto optimal allocation. We characterize the set of optimal policies, which require interventions in product and labor markets.

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