We introduce search unemployment à la Pissarides into Melitz' (2003) model of trade with heterogeneous firms. We allow … effect of trade influences labor market outcomes. Trade liberalization lowers unemployment and raises real wages as long as …. -- Trade liberalization ; unemployment ; search model ; firm heterogeneity …

The world's increasing integration through trade and the persistence of high unemployment in Europe, and other areas of … the world, highlight the need to understand the implications of free trade for unemployment. Trade, Jobs and Wages … analyses how employment levels and real wages are affected by international trade. Popular trade theory disregards the impact …