How an export boom affects unemployment

Arbeitspapier

Does trade affect the equilibrium rate of unemployment? To theoretically examine this question, we incorporate firm-union bargaining considerations into a model with a booming external sector and a stagnating manufacturing sector. In the model, a sustained improvement in the terms of trade lowers unemployment. To empirically investigate the predicted determinants of the unemployment rate, we use data for Australia, a country whose prosperity has always depended on the value of its exports. We find strong evidence that higher export prices, capital accumulation in tradeable goods industries and a lower unemployment benefit replacement rate each reduce the equilibrium unemployment rate.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ISER Discussion Paper ; No. 801

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Trade Unions: Objectives, Structure, and Effects
• Subject: equilibrium unemployment rate ; specific factors model ; bargaining ; mining boom ; Dutch disease ; Arbeitsmarkttheorie ; Terms of Trade ; Beschäftigungseffekt ; Bergbauerzeugnis ; Außenhandel ; Rohstoffreichtum ; Australien

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gaston, Noel ; Rajaguru, Gulasekaran
• Event: Veröffentlichung
• (who): Osaka University, Institute of Social and Economic Research (ISER)
• (where): Osaka
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/92558
• Last update: 10.03.2025, 11:43 AM CET