Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
Labor market distortions provide a second‐best case for protection. However, the implications are less obvious when the product market is imperfectly competitive too, as suggested by several partial equilibrium studies. This paper adopts a general equilibrium approach, combining unionization in labor markets with monopolistic competition in product markets. Two labor market settings are considered: fully centralized wage bargaining (“Scandinavia”, for short) and negotiation at the firm level (“Latin America”). The competitive labor market case is used as a benchmark. It is shown that in Latin America the second‐best tariff is higher, and the welfare level lower, than in the benchmark case. Scandinavia reaches the first best under free trade.