-over effects of labor market institutions ; unemployment ; international trade ; search frictions ; heterogeneous firms …We introduce search and matching unemployment into a model of trade with differentiated goods and heterogeneous firms …. Countries may differ with respect to size, geographical location, and labor market institutions. Contrary to the literature, our …

We introduce unemployment and endogenous selection of workers into different skill-classes in a trade model with two … sectors and heterogeneous firms. This allows us to study the distributional consequences and the skill-specific unemployment … real wages and unemployment levels in the unskilled labor intensive sector. However, the inequality of workers between …