Wage subsidies and international trade: When does policy coordination pay?

Sabastian Braun and Christian Spielmann
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Sabastian Braun: Kiel Institute for the World Economy

No 1007, Birkbeck Working Papers in Economics and Finance from Birkbeck, Department of Economics, Mathematics & Statistics

Abstract: National labour market institutions interact across national boundaries when product markets are global. Labour market policies can thus entail spill-overs, a fact widely ignored in the academic literature. This paper studies the effects of wage subsidies in an international duopoly model with unionised labour markets. We document both positive and negative spill-over effects and discuss the benefits and costs from international policy coordination both for the case of symmetric and asymmetric labour market institutions. Our results suggest that institutional differences could sign responsible for the slow speed at which labour market policy coordination has progressed so far.

Date: 2010-03
New Economics Papers: this item is included in nep-lab and nep-mic
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https://eprints.bbk.ac.uk/id/eprint/7548 First version, 2010 (application/pdf)

Related works:
Journal Article: Wage subsidies and international trade: When does policy coordination pay? (2012)
Working Paper: Wage subsidies and international trade: When does policy coordination pay? (2012)
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