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Trade Liberalization and Labor Unions

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Author Info
Toru Kikuchi ()
J. Amegashie ()

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Abstract

The present note builds a two-country model of Cournot oligopoly with country-specific labor unions. The impact of trade liberalization on wages and its consequent impact on union behavior and trade patterns are examined. We show that the union with relatively fewer number of firms will face the stronger pressure for wage moderation when trade is liberalized. We use this result to construct a simple example in which a country with higher autarky price becomes a net exporter of that good. We also discuss that our results are critically dependent on the mode of competition between firms. Copyright Kluwer Academic Publishers 2003

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File URL: http://hdl.handle.net/10.1023/A:1021204614476
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Publisher Info
Article provided by Springer in its journal Open Economies Review.

Volume (Year): 14 (2003)
Issue (Month): 1 (January)
Pages: 5-9
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Handle: RePEc:kap:openec:v:14:y:2003:i:1:p:5-9

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Web page: http://www.springerlink.com/link.asp?id=100323

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Related research
Keywords: trade liberalization labor unions trade patterns

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Huizinga, Harry, 1993. " International Market Integration and Union Wage Bargaining," Scandinavian Journal of Economics, Blackwell Publishing, vol. 95(2), pages 249-55.
  2. Oswald, Andrew J, 1985. " The Economic Theory of Trade Unions: An Introductory Survey," Scandinavian Journal of Economics, Blackwell Publishing, vol. 87(2), pages 160-93.
  3. Naylor, Robin, 1998. "International trade and economic integration when labour markets are generally unionised," European Economic Review, Elsevier, vol. 42(7), pages 1251-1267, July. [Downloadable!] (restricted)
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This page was last updated on 2008-8-26.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.