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Unemployment in an Interdependent World

Title data

Felbermayr, Gabriel ; Larch, Mario ; Lechthaler, Wolfgang:
Unemployment in an Interdependent World.
In: American Economic Journal : Economic Policy. Vol. 5 (2013) Issue 1 . - pp. 262-301.
ISSN 1945-7731
DOI: https://doi.org/10.1257/pol.5.1.262

Abstract in another language

How do changes in labor market institutions, like more generous unemployment benefits in one country, affect labor market outcomes in other countries? We set up a two-country Armingtonian trade model with frictions on the goods and labor markets. Contrary to the literature, higher labor market frictions increase unemployment at home and abroad. The strength of the spillover depends on the relative size of countries and on trade costs. It is exacerbated when real wages are rigid. Using panel data for 20 rich OECD countries, and controlling for institutions as well as for business cycle comovement, we confirm our theoretical predictions. (JEL E24, F16, J64, J65)

Further data

Item Type: Article in a journal
Refereed: Yes
Keywords: spill-over effects of labor market institutions; unemployment; international trade; search frictions; heterogeneous firms
Subject classification: F11, F12, F16, J64, L11
Institutions of the University: Faculties > Faculty of Law, Business and Economics > Department of Economics > Lehrstuhl Volkswirtschaftslehre VI: Empirische Wirtschaftsforschung
Faculties > Faculty of Law, Business and Economics > Department of Economics > Lehrstuhl Volkswirtschaftslehre VI: Empirische Wirtschaftsforschung > Lehrstuhl für Volkswirtschaftslehre VI: Empirische Wirtschaftsforschung - Univ.-Prof. Dr. Mario Larch
Faculties
Faculties > Faculty of Law, Business and Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics
Result of work at the UBT: Yes
DDC Subjects: 300 Social sciences > 330 Economics
Date Deposited: 14 Oct 2015 11:24
Last Modified: 01 Feb 2018 14:52
URI: https://eref.uni-bayreuth.de/id/eprint/16598