Labor Market Frictions as a Source of Comparative Advantage, with Implications for Unemployment and Inequality
Working Paper 15764
DOI 10.3386/w15764
Issue Date
Recent research has emphasized firm heterogeneity as a source of comparative advantage. Combining this approach with labor market frictions and worker heterogeneity provides a framework for studying the impact of trade on unemployment and inequality. This paper reviews this approach and reports a number of results from recent studies.