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Endogenous Labor Market Institutions in an Open Economy

Title data

Felbermayr, Gabriel ; Larch, Mario ; Lechthaler, Wolfgang:
Endogenous Labor Market Institutions in an Open Economy.
In: International Review of Economics and Finance. Vol. 23 (June 2012) . - pp. 30-45.
ISSN 1059-0560
DOI: https://doi.org/10.1016/j.iref.2011.10.004

Abstract in another language

The paper sets up a two-country asymmetric trade model with heterogeneous firms, search frictions and endogenous labor market institutions. Countries are linked by trade in goods and non-cooperatively set unemployment benefits to maximize national welfare. We show that more open and smaller economies have more generous unemployment benefit replacement rates as a larger fraction of the costs is borne by foreign trading partners. These results are in line with empirical stylized facts. Additionally, we find that the optimal level of unemployment benefits is independent from the level of unemployment benefits abroad and that non-cooperatively set unemployment rates are inefficiently high.

Further data

Item Type: Article in a journal
Refereed: Yes
Keywords: Endogenous 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 13:49
Last Modified: 14 Oct 2015 13:49
URI: https://eref.uni-bayreuth.de/id/eprint/16651