Labor Market Frictions, Firm Growth, and International Trade

Pablo Fajgelbaum ()

No 19492, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: I study the aggregate effects of labor market frictions in a small open economy where firms grow slowly and make fixed export investments. The model features interactions between dynamic investments in exporting and search frictions with job-to-job mobility. A calibration to Argentina's economy matching data on firm growth, worker transitions between firms, and export dynamics suggests that the real income gains from lowering frictions in job-to-job transitions are about 7 times larger than comparable reductions in frictions from unemployment. Barriers to worker mobility across firms matter for the real income gains of trade-cost reductions.

JEL-codes: D92 F16 J62 L11 (search for similar items in EconPapers)
Date: 2013-10
New Economics Papers: this item is included in nep-bec, nep-dge, nep-lab and nep-lma
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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