consistent with increasing inequality in every country, growth in residual wage inequality, rising unemployment, and reallocation … within and between industries. While the opening of trade yields welfare gains, unemployment and inequality within sectors … nonmonotonic effects on unemployment and inequality within sectors. As aggregate unemployment and inequality have within- and …

rigidities and trade impediments in shaping welfare, trade flows, productivity, price levels and unemployment rates. We show that … patterns of unemployment. Specifically, trade integration -- which benefits both countries -- may raise their rates of … unemployment. Moreover, differences in rates of unemployment do not necessarily reflect differences in labor market rigidities; the …

market frictions. We characterize the distributions of employment, unemployment, wages and income within and between sectors … as a function of structural parameters. We find that greater firm heterogeneity increases unemployment, wage inequality … frictions have non-monotonic effects on aggregate unemployment and inequality through within- and between-sector components …

labor market frictions and worker heterogeneity provides a framework for studying the impact of trade on unemployment and …