De-Globalization, Welfare State Reforms and Labor Market Outcomes

Hassan Molana, Catia Montagna* (Corresponding Author), George Onwordi

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


Within an open economy framework characterized by vertical linkages in production, and search frictions with two-sided heterogeneity in the labor market, raising trade barriers is shown to increase unemployment across skill levels and to reduce labor market participation and aggregate income. These effects are not necessarily moderated by maintaining frictionless mobility of capital across borders. We find that a flexicurity reform of a liberal welfare state can dampen the adverse effects of de-globalization.
Original languageEnglish
Journal IMF Economic Review
Publication statusAccepted/In press - 10 Sep 2021


  • flexicurity
  • welfare state
  • globalisation
  • participation
  • unemployment


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