De-Globalization, Welfare State Reforms and Labor Market Outcomes

Hassan Molana, Catia Montagna (Lead / Corresponding author), George E. Onwordi

    Research output: Contribution to journalArticlepeer-review

    1 Citation (Scopus)

    Abstract

    Within an open economy framework characterized by vertical linkages in production, and search frictions with two-sided heterogeneity in the labor market, raising trade barriers is shown to increase unemployment across skill levels and to reduce labor market participation and aggregate income. These effects are not necessarily moderated by maintaining frictionless mobility of capital across borders. We find that a flexicurity reform of a liberal welfare state can dampen the adverse effects of de-globalization.

    Original languageEnglish
    Pages (from-to)624-655
    Number of pages32
    JournalIMF Economic Review
    Volume69
    Early online date25 Oct 2021
    DOIs
    Publication statusPublished - Dec 2021

    ASJC Scopus subject areas

    • General Business,Management and Accounting
    • Economics, Econometrics and Finance(all)

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