This paper analyses the effects of redistribution in a model of international trade with heterogeneous firms in which a fair-wage effort mechanism leads to firm-specific wage payments and involuntary unemployment. The redistribution scheme is financed by profit taxes and gives the same absolute...

We develop a model of international trade between two symmetric countries that features inter-group inequality between entrepreneurs and workers, and also intra-group inequality within each of those two groups. Individuals in the economy are heterogeneous with respect to their entrepreneurial...

We develop a model to explain two-way migration of high-skilled individuals between countries that are similar in their economic characteristics. High-skilled migration is explained by a combination of two features: In both countries workers’ abilities are private knowledge, and the production...

We study how two distinct forms of globalisation, trade cost reductions and opening up of trade in previously shielded sectors, affect sector-specific wages, employment levels and aggregate welfare in a two-country model of general oligopolistic equilibrium (GOLE) with partly unionised labour...

This paper develops a two-country model of international trade in which citizens who are heterogeneous with respect to their factor endowments vote over tariffs and income tax rates. In the politico-economic equilibrium, each country chooses its national policies by majority voting, taking the...

This paper analyses the effects of tariff reforms on welfare and market access in a competitive small open economy that is characterised by involuntary unemployment due to non-market clearing wages that are fixed either in terms of the numeraire or in real terms. We show that recent...

In an international oligopoly model, we investigate how trade liberalisation impacts on collective bargaining outcomes when workers are represented by open shop unions. We find that, with intermediate levels of union density, trade liberalisation may lead to higher negotiated wages even if no...

We develop a two-country, multi-sector model of oligopoly in which unionised and non-unionised sectors interact in general equilibrium. The model is used to study the impact of trade liberalisation, deunionisation and firm entry on wages in unionised and non-unionised sectors, and on welfare. We...

Within a small open economy fair wage model with unemployment of unskilled workers, we show that exogenous unskilled immigration increases the welfare of natives if the elasticity of the inverse labour demands exceeds a positive finite threshold. This threshold depends positively on the...

This paper formulates a structural empirical model of heterogeneous firms whose workers exhibit fair-wage preferences, leading to a link between a firm’s operating profits and wages of workers employed by this firm. We estimate the parameters of the model in a data-set of five European...