Inequality and Unemployment in a Global Economy

Elhanan Helpman, Stephen Redding and Oleg Itskhoki

No 7353, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper develops a new framework for examining the distributional consequences of international trade that incorporates firm and worker heterogeneity, search and matching frictions in the labor market, and screening of workers by firms. Larger firms pay higher wages and exporters pay higher wages than non-exporters. The opening of trade enhances wage inequality and raises unemployment, but expected welfare gains are ensured if workers are risk neutral. And while wage inequality is larger in a trade equilibrium than in autarky, reductions of trade impediments can either raise or reduce wage inequality.

Keywords: International trade; Risk; Unemployment; Wage inequality (search for similar items in EconPapers)
JEL-codes: E24 F12 F16 (search for similar items in EconPapers)
Date: 2009-07
New Economics Papers: this item is included in nep-int, nep-lab, nep-ltv and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (64)

Downloads: (external link)
https://cepr.org/publications/DP7353 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Inequality and Unemployment in a Global Economy (2010)
Working Paper: Inequality and Unemployment in a Global Economy (2010)
Working Paper: Inequality and Unemployment in a Global Economy (2009)
Working Paper: Inequality and unemployment in a global economy (2009)
Working Paper: Inequality and Unemployment in a Global Economy (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:7353

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP7353

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().