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De-globalisation, welfare state reforms and labour market outcomes

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  • Hassan Molana
  • Catia Montagna
  • George E. Onwordi

Abstract

Within an open economy framework characterised by vertical linkages in production and search frictions and two-sided heterogeneity in the labour market, raising trade barriers is shown to increase unemployment across skill levels, and to reduce labour market participation and aggregate income. These effects are not necessarily moderated by maintaining frictionless mobility of capital across borders. We find that a flexicurity reform of a liberal welfare state can dampen the adverse effects of de-globalisation.

Suggested Citation

  • Hassan Molana & Catia Montagna & George E. Onwordi, 2020. "De-globalisation, welfare state reforms and labour market outcomes," Discussion Papers 2020-19, University of Nottingham, GEP.
    • Handle: RePEc:not:notgep:2020-20
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    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F6 - International Economics - - Economic Impacts of Globalization

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