Globalization and labor market outcomes: Wage bargaining, search frictions, and firm heterogeneity

• 成果类型: Article
• 署名作者: Felbermayr, Gabriel; Prat, Julien; Schmerer, Hans-Joerg
• 署名单位: University Hohenheim; Leibniz Association; Ifo Institut; University of Munich; Consejo Superior de Investigaciones Cientificas (CSIC); CSIC - Institut d'Analisi Economica (IAE); Eberhard Karls University of Tubingen
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2010.07.004
• 发表日期: 2011
• 页码: 39-73
• 关键词: trade liberalization; unemployment; search model; firm heterogeneity

摘要

We introduce search unemployment into Melitz's trade model. Firms' monopoly power on product markets leads to strategic wage bargaining. Solving for the symmetric equilibrium we show that the selection effect of trade influences labor market outcomes. Trade liberalization lowers unemployment and raises real wages as long as it improves average productivity. We show that this condition is likely to be met by a reduction in variable trade costs or by entry of new trading countries. Calibrating the model shows that the long-run impact of trade openness on the rate of unemployment is negative and quantitatively significant. (C) 2010 Elsevier Inc. All rights reserved.