Trade and Labor Market Outcomes

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Show simple item record HELPMAN, Elhanan ITSKHOKI, Oleg REDDING, Stephen 2011-06-23T09:34:52Z 2011-06-23T09:34:52Z 2011-01-01
dc.identifier.issn 1830-7736
dc.description.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. en
dc.format.mimetype application/pdf
dc.language.iso en en
dc.relation.ispartofseries 2011/03
dc.relation.ispartofseries EUI MWP LS en
dc.rights info:eu-repo/semantics/openAccess en
dc.subject Inequality en
dc.subject Unemployment en
dc.subject Trade en
dc.subject Labor market policy en
dc.subject F12 en
dc.subject F16 en
dc.subject J64 en
dc.title Trade and Labor Market Outcomes en
dc.type Other en
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