Trade in Unemployment

Rapport Rapport de recherche Trade in Unemployment eng 2014 author Carrere Céline 681177 author Olarreaga Marcelo 0000-0002-1208-1544 28000 author Robert-Nicoud Frédéric 85680 author Fugazza Marco Carlo 83237 54 9916 http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=9916 We embed a model of the labor market with sector-specific search-and-matching frictions into a Ricardian model with a continuum of goods to show that trade liberalization causes higher unemployment in countries with comparative advantage in sectors with strong labor market frictions and leads to lower unemployment in countries with comparative advantage in sectors with weak labor market frictions. We test this prediction in a panel dataset of 97 countries during the period 1995-2009 and find that the data supports the theoretical prediction. Our results also help reconciliate the apparently contradicting evidence in the empirical literature on the impact of trade on unemployment. Search unemployment Trade Dewey 320 Dewey 330 Dewey 330/650 International Trade and Regional Economics - Centre for Economic Policy Research London International Trade and Regional Economics - Centre for Economic Policy Research Centre for Economic Policy Research (CEPR) - Discussion Paper DP9916 24 Global Studies Institute 0DJ 114 Institute of Economics and Econometrics S2 false 3e9f77d1-8e04-44b8-876f-0c180dc81107 Report Public 163.pdf 484407 application/pdf openAccess Centres et instituts / Global Studies Institute Faculté d'économie et de management / Institute of Economics and Econometrics

Title	Published in	Year	Views	Downloads

Trade in Unemployment		2014	817	310
Smoke in the (Tariff) Water	World economy	2011	463	3

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Fugazza, Marco Carlo