EconPapers    
Economics at your fingertips  
 

International Trade and Unemployment—the Worker-selection Effect

Marco Pinto and Jochen Michaelis

Review of International Economics, 2014, vol. 22, issue 2, 226-252

Abstract: This paper investigates the labor market effects of trade liberalization. We incorporate trade unions and heterogeneous workers into the Melitz framework. Workers differ with respect to their abilities. Our main findings are: (i) trade liberalization harms low-ability workers, they lose their job and switch to long-term unemployment (worker-selection effect); (ii) high-ability workers are better off in terms of both higher wages and higher employment; (iii) if a country is endowed with a large fraction of low-ability workers, trade liberalization leads to a rise in aggregate unemployment—in this case, trade liberalization may harm a country's welfare; (iv) the overall employment and welfare effect crucially hinges on the characteristics of the wage bargain.

Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1111/roie.12111 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: International Trade and Unemployment - the Worker-Selection Effect (2011) Downloads
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:bla:reviec:v:22:y:2014:i:2:p:226-252

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0965-7576

Access Statistics for this article

Review of International Economics is currently edited by E. Kwan Choi

More articles in Review of International Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2022-01-04
Handle: RePEc:bla:reviec:v:22:y:2014:i:2:p:226-252