De-Globalization, Welfare State Reforms and Labor Market Outcomes

Hassan Molana; Catia Montagna; George E. Onwordi

doi:10.1057/s41308-021-00150-8

De-Globalization, Welfare State Reforms and Labor Market Outcomes

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

Research output: Contribution to journal › Article › peer-review

2 Citations (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 language	English
Pages (from-to)	624-655
Number of pages	32
Journal	IMF Economic Review
Volume	69
Early online date	25 Oct 2021
DOIs	https://doi.org/10.1057/s41308-021-00150-8
Publication status	Published - Dec 2021

ASJC Scopus subject areas

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

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

Access to Document

10.1057/s41308-021-00150-8

Cite this

@article{45e2a5057d7e43ab98c594362ab0ed9a,

title = "De-Globalization, Welfare State Reforms and Labor Market Outcomes",

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.",

author = "Hassan Molana and Catia Montagna and Onwordi, {George E.}",

note = "Funding Information: Acknowledgements We are grateful to two anonymous referees and to the Editor of the Journal for very constructive suggestions. We would also like to thank Stephen Boyd, Nils Braakmann, Holger G{\"o}rg, Sebastian K{\"o}nings, Steve Matsus, Fredrik Sj{\"o}holm, John Sk{\aa}tun, Allan S{\o}rensen and participants at the NORFACE Welfare State Futures Programme Final Conference at the EUI in Fiesole and at the Glo-bLabWS final workshop in Aberdeen for useful comments. This work was supported by the NORFACE ERA-NET (New Opportunities for Research Funding Agency Co-operation in Europe Network) Welfare State Futures Programme, Grant Number 462-14-120. The usual disclaimer applies. Publisher Copyright: {\textcopyright} 2021, International Monetary Fund.",

year = "2021",

month = dec,

doi = "10.1057/s41308-021-00150-8",

language = "English",

volume = "69",

pages = "624--655",

}

TY - JOUR

T1 - De-Globalization, Welfare State Reforms and Labor Market Outcomes

AU - Molana, Hassan

AU - Montagna, Catia

AU - Onwordi, George E.

N1 - Funding Information: Acknowledgements We are grateful to two anonymous referees and to the Editor of the Journal for very constructive suggestions. We would also like to thank Stephen Boyd, Nils Braakmann, Holger Görg, Sebastian Könings, Steve Matsus, Fredrik Sjöholm, John Skåtun, Allan Sørensen and participants at the NORFACE Welfare State Futures Programme Final Conference at the EUI in Fiesole and at the Glo-bLabWS final workshop in Aberdeen for useful comments. This work was supported by the NORFACE ERA-NET (New Opportunities for Research Funding Agency Co-operation in Europe Network) Welfare State Futures Programme, Grant Number 462-14-120. The usual disclaimer applies. Publisher Copyright: © 2021, International Monetary Fund.

PY - 2021/12

Y1 - 2021/12

N2 - 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.

AB - 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.

UR - http://www.scopus.com/inward/record.url?scp=85117886681&partnerID=8YFLogxK

U2 - 10.1057/s41308-021-00150-8

DO - 10.1057/s41308-021-00150-8

M3 - Article

AN - SCOPUS:85117886681

SN - 2041-4161

VL - 69

SP - 624

EP - 655

JO - IMF Economic Review

JF - IMF Economic Review

ER -

De-Globalization, Welfare State Reforms and Labor Market Outcomes

Abstract

ASJC Scopus subject areas

UN SDGs

Access to Document

Other files and links

Fingerprint

Cite this