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Recent theoretical literature studies how labor market reforms in one country can affect labor market outcomes in other countries, thereby rationalizing widelyheld policy beliefs and empirical evidence. But what is the quantitative relevance of such...

We introduce search and matching unemployment into a model of trade with differentiated goods and heterogeneous firms. Countries may differ with respect to size, geographical location, and labor market institutions. Contrary to the literature, our...

The paper sets up a two-country asymmetric trade model with heterogeneous firms, search frictions and endogenous labor market institutions. Countries are linked by trade in goods and non-cooperatively set unemployment benefits to maximize national...