Fair Wages and Unemployment in a Small Open Economy
نویسنده
چکیده
In this paper we develop a model of a multi-sector multi-factor small open economy with involuntary unemployment due to fair wages. The model is used inter alia to analyse the labour market effects of changes in unemployment benefits and the domestic labour supply. Our analysis covers both the case where factor prices do not react to endowment changes – as in the Heckscher-Ohlin model – and the case where they do. Results are sensitive to this distinction, thereby emphasizing the benefit of employing a general production structure that encompasses both cases. JEL classification: F11, F16
منابع مشابه
Globalisation and Labour Markets Research Paper 2002 / 34 A General Model of Fair Wages in an Open Economy
We analyse the behaviour of a multi-sector small open economy with involuntary unemployment due to fair wages. The equilibrium level of employment depends in an intuitively appealing way on the sectoral structure of the economy. It is shown that induced changes in employment are a driving force behind many of the comparative static results. Fair wage variants of the Heckscher-Ohlin and the Rica...
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