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Market Size and Economic Integration when Labor Markets are Unionized

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  • Andromachi S. Piperakis
  • Robert C. Hine
  • Peter W. Wright

Abstract

The paper explores the effects of economic integration on trade, wages, and welfare when market sizes differ. A duopoly model with two-way intraindustry trade in similar products and with unionized labor markets is employed. It is confirmed that, for a wide range of different relative market sizes, integration leads to higher wages, employment, and welfare. However, where market sizes differ widely, the reduction of trade barriers leads to a reduction of wages, employment, and-in some circumstances-welfare in the country with the large market. Copyright Blackwell Publishing Ltd 2003.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of International Economics.

Volume (Year): 11 (2003)
Issue (Month): 3 (08)
Pages: 483-494

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Handle: RePEc:bla:reviec:v:11:y:2003:i:3:p:483-494

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576

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Cited by:
  1. Lommerud, Kjell Erik & Meland, Frode & Straume, Odd Rune, 2005. "Globalisation and union opposition to technological change," Working Papers in Economics 01/05, University of Bergen, Department of Economics.

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