DP7707 Labor Market Frictions as a Source of Comparative Advantage, with Implications for Unemployment and Inequality

Author(s): Elhanan Helpman
Publication Date: February 2010
Keyword(s): inequality, labor market frictions, trade, unemployment
JEL(s): F12, F16, J64
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=7707

Recent research has emphasized firm heterogeneity as a source of comparative advantage. Combining this approach with labor market frictions and worker heterogeneity provides a framework for studying the impact of trade on unemployment and inequality. This paper reviews this approach and reports a number of results from recent studies.