Discussion Paper

No. 2012-2 | January 10, 2012
FDI, Skill-Specific Unemployment, and Institutional Spillover Effects

Abstract

This paper proposes a multi-industry trade model with integrated capital markets and Mortensen and Pissarides search frictions in the labor market. Institutional changes in the model trigger adjustments at the intensive and extensive margin of labor demand. At the extensive margin a shift of the specialization pattern amongst the integrated countries magnifies the effects at the intensive industry margin via trade and FDI. Moreover, the distinction between high- and low-skill workers facilitates the analysis of skill-specific institutional changes. A government can influence wages and unemployment of the low-skilled by manipulating labor market institutions concerning high-skill workers only. One-sided interventions affect all workers at home and abroad irrespective of their level of skill.

Paper submitted to the special issue
Responding to the Labour Market Challenges of Globalisation
 

JEL Classification

E24 J6 F16

Cite As

Hans-Jörg Schmerer (2012). FDI, Skill-Specific Unemployment, and Institutional Spillover Effects. Economics Discussion Papers, No 2012-2, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2012-2

Assessment



Comments and Questions


Anonymous - Referee Report 1
February 06, 2012 - 08:54

see attached file


Hans-Jörg Schmerer - Response to Referee Report 1
July 30, 2012 - 11:17

see attached file


Anonymous - Invited Reader Comment
February 17, 2012 - 16:55

see attached file


Hans-Jörg Schmerer - Response to Invited Reader Comment
July 30, 2012 - 11:18

see attached file


Anonymous - Referee Report 2
February 21, 2012 - 08:51

see attached file


Hans-Jörg Schmerer - Response to Referee Report 2
July 31, 2012 - 09:42

see attached file


Hans-Jörg Schmerer - Revised Version
July 31, 2012 - 10:02

see attached file


Anonymous - Referee Report 1 on Revised Version
August 14, 2012 - 09:01

see attached file


Anonymous - Referee Report 2 on Revised Version
August 14, 2012 - 09:02

see attached file