Unemployment in an Interdependent World

• 成果类型: Article
• 署名作者: Felbermayr, Gabriel J.; Larch, Mario; Lechthaler, Wolfgang
• 署名单位: Leibniz Association; Ifo Institut; University of Munich; University of Nottingham; University of Bayreuth; University of Munich; Leibniz Association; Ifo Institut; Leibniz Association; Institut fur Weltwirtschaft an der Universitat Kiel (IFW)
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.5.1.262
• 发表日期: 2013
• 页码: 262-301
• 关键词: labor-market rigidities; European unemployment; TRADE; institutions; models; search

摘要

How do changes in labor market institutions, like more generous unemployment benefits in one country, affect labor market outcomes in other countries? We set up a two-country Armingtonian trade model with frictions on the goods and labor markets. Contrary to the literature, higher labor market frictions increase unemployment at home and abroad. The strength of the spillover depends on the relative size of countries and on trade costs. It is exacerbated when real wages are rigid. Using panel data for 20 rich OECD countries, and controlling for institutions as well as for business cycle comovement, we confirm our theoretical predictions. (JEL E24, F16, J64, J65)