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The Impact of Globalisation with Rigid Labour Markets
The Impact of Globalisation with Rigid Labour Markets
This dissertation examines the impact of globalisation when labour markets are imperfect. Chapters 2 and 3 start with an overview about recent trends in globalisation and provide evidence for labour market rigidity in developed countries. Chapter 4 studies minimum wages in a simple factor allocation model and derives basic results that are generalised in a Heckscher-Ohlin model in chapter 5. Chapter 6 analyses wage rigidity in a specific factors model. Finally, imperfect labour markets are implemented in a new economic geography framework to show that unemployment fosters agglomeration of economic activity. The main message is that labour market rigidity causes welfare losses from trade in a number of theoretical models. It is argued that wage subsidies can help to overcome both the inefficiency and the distribution problem.
Globalisation, Imperfect Labour Markets, Trade, New Economic Geography
Seidel, Tobias
2007
English
Universitätsbibliothek der Ludwig-Maximilians-Universität München
Seidel, Tobias (2007): The Impact of Globalisation with Rigid Labour Markets. Dissertation, LMU München: Faculty of Economics
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Abstract

This dissertation examines the impact of globalisation when labour markets are imperfect. Chapters 2 and 3 start with an overview about recent trends in globalisation and provide evidence for labour market rigidity in developed countries. Chapter 4 studies minimum wages in a simple factor allocation model and derives basic results that are generalised in a Heckscher-Ohlin model in chapter 5. Chapter 6 analyses wage rigidity in a specific factors model. Finally, imperfect labour markets are implemented in a new economic geography framework to show that unemployment fosters agglomeration of economic activity. The main message is that labour market rigidity causes welfare losses from trade in a number of theoretical models. It is argued that wage subsidies can help to overcome both the inefficiency and the distribution problem.