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Global Firms, (de)unionization and Wage Inequality

Author

Listed:
  • Óscar Afonso

    (University of Porto)

  • Tiago Neves Sequeira

    (Univ Coimbra, CeBER)

  • Marcelo Santos

    (Univ Coimbra, CeBER)

  • Pedro Cunha Neves

    (University of Porto)

Abstract

This paper studies the simultaneous effects of relocation of production (as part of globalization) and institutions on intra- and inter-country wage inequality. Firstly, empirical evidence shows that labor unions act at decreasing inequality, but this shrinking effect tends to be mitigated by globalization. Theoretically, we study the conditions under which this empirical evidence is verified. Unskilled labor-intensive relocations together with (de)unionization processes of the labor force contributed to the increasing path of intra-country wage inequality observed in some of the leading countries. However, most recently, skilled relocations may help to decrease intra-country inequality in leading countries (e.g., the US), but to increase it in follower countries (e.g., China).

Suggested Citation

  • Óscar Afonso & Tiago Neves Sequeira & Marcelo Santos & Pedro Cunha Neves, 2023. "Global Firms, (de)unionization and Wage Inequality," Open Economies Review, Springer, vol. 34(5), pages 979-1013, November.
    • Handle: RePEc:kap:openec:v:34:y:2023:i:5:d:10.1007_s11079-023-09716-7
    DOI: 10.1007/s11079-023-09716-7
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    More about this item

    Keywords

    Global firms; Technological knowledge; Bargaining structure; Employment; Wages;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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