Working Paper: CEPR ID: DP7707
Authors: Elhanan Helpman
Abstract: Recent research has emphasized firm heterogeneity as a source of comparative advantage. Combining this approach with labor market frictions and worker heterogeneity provides a framework for studying the impact of trade on unemployment and inequality. This paper reviews this approach and reports a number of results from recent studies.
Keywords: inequality; labor market frictions; trade; unemployment
JEL Codes: F12; F16; J64
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| labor market frictions (J29) | trade flows (F10) |
| trade flows (F10) | unemployment rates (J64) |
| removing trade impediments (F13) | comparative advantage and productivity (F11) |
| removing trade impediments (F13) | inequalities (I14) |
| trade influences unemployment (F66) | unemployment rates (J64) |
| trade influences wage inequality (F66) | wage inequality (J31) |
| labor market frictions (J29) | unemployment relative to trade partners (F66) |