IDEAS home Printed from
   My bibliography  Save this article

Unemployment and the welfare effects of trade policy


  • Udo Kreickemeier


In this paper the welfare effects of tariffs and import quotas in the presence of involuntary unemployment are derived and compared. The framework used is the standard model of a competitive small open economy with many goods and factors. Optimum levels of the respective trade policy instruments are derived, as well as welfare increasing reform strategies. In all cases, the labour intensity of the import-competing sectors turns out to be a crucial variable for deriving the welfare effects.

Suggested Citation

  • Udo Kreickemeier, 2005. "Unemployment and the welfare effects of trade policy," Canadian Journal of Economics, Canadian Economics Association, vol. 38(1), pages 194-210, February.
  • Handle: RePEc:cje:issued:v:38:y:2005:i:1:p:194-210

    Download full text from publisher

    File URL:
    File Function: Full text
    Download Restriction: Available to subscribers only. Alternative access through JSTOR and Ingenta.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. Francis K. Cheung & Carl Davidson, 1991. "Bargaining Structure and Strike Activity," Canadian Journal of Economics, Canadian Economics Association, vol. 24(2), pages 345-371, May.
    3. Conlin, Michael & Furusawa, Taiji, 2000. "Strategic Delegation and Delay in Negotiations over the Bargaining Agenda," Journal of Labor Economics, University of Chicago Press, vol. 18(1), pages 55-73, January.
    4. Fershtman, Chaim & Judd, Kenneth L, 1987. "Equilibrium Incentives in Oligopoly," American Economic Review, American Economic Association, vol. 77(5), pages 927-940, December.
    5. Joel Watson, 1998. "Alternating-Offer Bargaining with Two-Sided Incomplete Information," Review of Economic Studies, Oxford University Press, vol. 65(3), pages 573-594.
    6. Stephen R. G. Jones, 1989. "The Role of Negotiators in Union-Firm Bargaining," Canadian Journal of Economics, Canadian Economics Association, vol. 22(3), pages 630-642, August.
    7. Dertouzos, James N & Pencavel, John H, 1981. "Wage and Employment Determination under Trade Unionism: The International Typographical Union," Journal of Political Economy, University of Chicago Press, vol. 89(6), pages 1162-1181, December.
    8. Kennan, John & Wilson, Robert, 1993. "Bargaining with Private Information," Journal of Economic Literature, American Economic Association, vol. 31(1), pages 45-104, March.
    9. Kennan, John & Wilson, Robert, 1989. "Strategic Bargaining Models and Interpretation of Strike Data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(S), pages 87-130, Supplemen.
    10. Tracy, Joseph S, 1986. "An Investigation into the Determinants of U.S. Strike Activity," American Economic Review, American Economic Association, vol. 76(3), pages 423-436, June.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Rod Falvey & Udo Kreickemeier, 2017. "Tariff Reforms with Rigid Wages," World Scientific Book Chapters,in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 4, pages 95-116 World Scientific Publishing Co. Pte. Ltd..
    2. Fabio Antoniou & Panos Hatzipanayotou & Nikos Tsakiris, 2015. "Destination vs. Origin-based Commodity Taxation in Large Open Economies with Unemployment," CESifo Working Paper Series 5585, CESifo Group Munich.
    3. Chi-Chur Chao & Bharat R. Hazari & Eden S. H. Yu, 2010. "Quotas, Spillovers, and the Transfer Paradox in an Economy with Tourism," Review of International Economics, Wiley Blackwell, vol. 18(2), pages 243-249, May.

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cje:issued:v:38:y:2005:i:1:p:194-210. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Prof. Werner Antweiler). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.