We introduce search unemployment à la Pissarides into Melitz' (2003) model of trade with heterogeneous firms. We allow wages to be individually or collectively bargained and analytically solve for the equilibrium. We find that the selection effect of trade influences labor market outcomes....

This paper documents a robust empirical regularity: in the long-run, higher trade openness is causally associated to a lower structural rate of unemployment. We establish this fact using: (i) panel data from 20 OECD countries, (ii) cross-sectional data on a larger set of countries. The time...

In theoretical trade models with variable markups and collective wage bargaining, exportexposure may reduce the exporter wage premium. We test this prediction using linkedGerman employer-employee data from 1996 to 2007. To separate the rent-sharingmechanism from assortative matching, we exploit...

Increasing wage inequality between similar workers plays an important role for overall inequality trends in industrialized societies. To analyze this pattern, we incorporate directed labor market search into a dynamic model of international trade with heterogeneous firms and homogeneous workers....

In theoretical trade models with variable markups and collective wage bargaining, export exposure may reduce the exporter wage premium. We test this prediction using linked German employer-employee data from 1996 to 2007. To separate the rent-sharing mechanism from assortative matching, we...

Increasing wage inequality between similar workers plays an important role for overall inequality trends in industrialized societies. To analyze this pattern, we incorporate directed labor market search into a dynamic model of international trade with heterogeneous firms and homogeneous workers....

This paper analyzes the effect of Product Market Regulation (PMR) on unemployment in a search model with heterogeneous multiple-worker firms. In our setup, PMR modifies the distribution of firm productivities, thereby affecting the equilibrium rate of unemployment. We distinguish between PMR...

Am 3. November 2020 entscheidet sich, ob Donald Trump ein zweites Mal zum US-Präsidenten gewählt wird. Er hat seinen Wahlkampfslogan »Make America Great Again« rigoros verfolgt. Im Zuge dessen wurden diplomatische Konventionen gebrochen und jahrzehntealte internationale Verträge für...

We analyze the evolution of the exporter wage premium (EWP) during the Great Recession and the resulting impact on wage inequality in Germany. Our results show that the EWP declined sharply between 2007 and 2008 and stagnated afterwards. This pattern is due to exporters starting to adjust their...

This paper proposes a simple multi-industry trade model with search frictions in the labor market. It will be shown that the reallocation of capital across countries in formof FDI leads to changes in unemployment at the extensive and intensive industry margins. Whether a country benefits from...